Beth Kaufman and Bryson Morgan Comment on Blind Trusts in New York Times

02.05.2022
New York Times

Perhaps you’ve lost some money betting on stocks, like MetaZuckerbook, and you feel you ought to do something in the face of a wildly swinging market where a giant company can soar or lose a quarter of its value in a day.

Fortunately there’s a sound strategy that even sworn enemies like Senator Josh Hawley and Representative Alexandria Ocasio-Cortez agree on: Take yourself out of the investing equation.

. . .

Two Senate Democrats, Mark Kelly of Arizona and Jon Ossoff of Georgia, are sponsoring a bill to limit members of Congress’s trading activity, and they have blind trusts themselves. Unfortunately, their offices would not put me in touch with their lawyers or investment advisers to discuss the trusts’ mechanics or either man’s investing philosophy.

But other lawyers who have set up blind trusts said the vehicles were often a kind of last resort. “It’s a little bit of a pain,” said Bryson B. Morgan, who practices with the political law and exempt organizations groups at Caplin & Drysdale in Washington. “There are various other easier ways to deal with conflicts of interest.”

The simplest is to sell all the stocks and other investments that might pose a problem and replace them with diversified holdings — an approach that any civilian can use without a lawyer or an investment pro, as Mr. Morgan’s colleague Beth Shapiro Kaufman pointed out.

“They can buy a certain set of mutual funds that have their preferred asset allocation and rebalance on a preset, periodic basis,” she said. “Then they just have to be disciplined when they get a pit in their stomachs.”

For the full article, please visit The New York Times’ website.

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