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Oct 24, 2018

Yes, We Can All Get Along: Investors in Red States vs. Blue States

By Stash Team

Stash’s data team reveals the key differences between investors in red and blue states.

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News flash: The country is politically polarized. Perhaps more so than at any point in modern history.

For many Americans, this has led to, and perhaps been exacerbated by, a relentless wave of political news and discussion piercing our personal bubbles. It’s in our social media news feeds, a constant on cable news, and discussed, with regularity, around the water cooler at work.

And the rift is real between red and blue America. Democrats, Republicans, and the independents around the country seem to be speaking completely different languages. We can’t agree on anything: Is the president doing a good job? Is ending net neutrality a positive thing for the country? Are Kim Jong-un and Vladimir Putin our friends now?

The answers largely depend on who you ask. But there is one thing most people—no matter what their political beliefs are—can agree on: The typical investment portfolio is in pretty good shape, considering that the market has been on a decade-long bull-run.

Red states vs. blue states: Stash digs in

Stash’s data team analyzed data from more than 805,000 users’ investment portfolios to see if investors in “red” states differ in any significant way from their “blue” counterparts.

As it turns out, Americans invest mostly the same way. Here is the comparison of the largest portfolio allocations, on average, of Stashers in blue, red, and swing states:

*Risk mixes include “moderate,” “conservative,” “aggressive” and “long-term” mix ETFs.

 

For this analysis, “red” states are states that were carried by the Republicans in the 2004, 2008, 2012 and 2016 presidential elections, and “blue” states are states that were carried by the Democrats during those elections. Swing states are states not overwhelmingly carried by either party during those elections.

What we found

  • The average blue, red, and swing-state investor are very similar. Among the top holdings in blue, red, and swing states, there were few differences.
  • Amazon is popular, despite being politically contentious. Amazon is the only single stock that appeared in the top ten in each category. It may be a surprise to find that it’s even a hit in red states, as the company has become a favorite target of President Trump.
  • Everyone likes marijuana, but investors in red states buy it the most. The Corporate Cannabis ETF is a top holding among investors in all states, but investors in red states hold an edge in terms of overall portfolio allocation dedicated to marijuana investments.
  • Also, every state that has legalized marijuana, so far, is a blue state with the exception of Alaska. So, even though pot legalization is almost entirely a blue-state phenomenon, red-state investors are taking advantage.
  • Blue states do the right thing. The Do The Right Thing ETF—which tracks companies with a high ESG (environmental, social and governance) score—ranks in the top ten investments for blue and swing states, but not in red states.

The key takeaway from the Stash data team is that despite a polarized political atmosphere, investors are finding some common ground. That may or may not make you feel better about the current political climate, but it may be a topic that helps break the ice with politically-opposed relatives on Thanksgiving.

Methodology:

Surveyed 6,759 Americans via SurveyMonkey:

Age Demographics
Under 18 – 0.03%
18-24 – 10.31%
25-34 – 31.69%
35-44 – 25.88%
45-54 – 17.84%
55-64 – 10.99%
65+ – 3.25%

Gender Demographics
Male – 62.09%
Female – 37.56%
Other – 0.34%

 

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    Stash Team

    “Portfolio Breakdowns Across Red, Blue & Swing States”
    Portfolio data from 805,558 Stash users, comparing the largest portfolio allocations, on average, of Stashers in blue, red, and swing states; “red states” are states that were carried by the Republicans in the 2004, 2008, 2012 and 2016 presidential elections; “blue states” are states that were carried by the Democrats in the 2004, 2008, 2012 and 2016 presidential elections; “swing states” are states that were not overwhelmingly carried by either the Republicans or the Democrats in the 2004, 2008, 2012 and 2016 presidential elections.
    “How Investments Stack Up By State”
    Data from 805,558 Stash users; map details Stash investments that over-indexed state-by-state across the U.S.
    Disclosure:
    1. The survey was conducted online within the United States by Stash using Survey Monkey technology in Sept 2018. 6,759 Stash clients completed the survey.
    2. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. This information is for informational and educational purpose only, represents an assessment of the market environment as of the date of publication, and is subject to change without notice. The information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. None of this material should be construed as an offer to sell or a solicitation of an offer to buy any particular security. Any reference to a specific company or security is for illustrative purposes, is available on Stash as of the date of publication, and is not necessarily representative of all investments available on Stash. Images of holdings and performance are hypothetical and provided for information purposes only. This information is not intended as a recommendation to buy, sell, hold or directly invest in any particular company, security, asset class or as a promise of future performance. All product and company names referenced are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them. Stash does not endorse the illegal use of Marijuana.
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