Sunday, January 21, 2001
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Posted on: Sunday, January 21, 2001

Strategy pays off for Bush portfolio

Bush portfolio will take hit from taxman

USA Today

WASHINGTON - It’s hard to tell if George W. Bush’s investment portfolio is compassionate, but it’s certainly conservative.

It also offers investors a look at a different investment strategy.

The president has more than half his assets in U.S. Treasury notes, according to financial disclosures filed last year. Stocks and mutual funds account for 11 percent to 17 percent of his portfolio. The rest is invested in real estate, cash and private partnerships.

That strategy paid off in 2000. The average Treasury note rose more than 10 percent vs. a decline of 9.1 percent for the Standard & Poor’s 500-stock index. The average stock mutual fund fell 1.7 percent.

But last year was a bearish anomaly: Historically, stocks have outperformed bonds.

Still, Bush can afford to be cautious. His financial disclosures put his net worth at $11 million to $29 million.

In 1999, Bush and his wife, Laura, had an adjusted gross income of $1.6 million, including $546,380 in capital gains, $86,691 in dividends and $781,051 in interest, according to the couple’s tax returns.

Most of Bush’s fortune comes from the 1998 sale of his interest in the Texas Rangers baseball team, which netted him nearly $15 million. His annual salary as governor of Texas was $115,345, but he forfeited some of that money while he was campaigning for president.

Meanwhile, Bush has had his holdings managed by a blind trust since 1995, when he was elected governor. Northern Trust, the trust manager, makes investment decisions without his knowledge in an effort to avoid conflicts of interest.

But while Bush’s investment in a heavy dose of Treasury notes has its rewards, it also exacts a toll at tax time.

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