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

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:

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 and socially responsible investments—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%