Obama: Feeling Our Financial Pain?

He started out the stock market slide with mostly conservative investments. But that doesn't mean the Commander-in-Chief hasn't felt the economic squeeze

By Ben Steverman

The man elected to lead the U.S. out of its financial crisis has experienced some financial pain himself.

Here's the good news for President Barack Obama, whose personal portfolio is partly disclosed in public filings: A conservative investing style may have saved the First Family from the deep market losses that afflicted many Americans' nest eggs.

However, based on the most recent financial disclosure forms from Obama, he still may have lost up to $248,000 in the financial markets since the beginning of 2008. His stock and bond investments may have lost 38% of their value in the past 15 months.

Pursuing a Super-Safe Strategy

Many other politicians also took a financial hit in the past year. For example, 48 members of Congress held $7.7 million in Citigroup (C) shares, which have declined 91% since the start of 2008.

According to forms filed last May but covering the end of 2007, the Obamas were keeping most of their assets —between $1.5 million and $6.1 million —in super-safe investments like bank checking accounts, money market accounts, and U.S. Treasury notes. This was exactly the place to put your money in 2008, when stocks and even many bonds tumbled in value. The Standard & Poor's 500 fell 37% in 2008 and has dropped another 15% in 2009.

Much of the Obama fortune is brand new. He earned more than $4 million from book royalties in 2007.

Mutual Funds Only

Financial disclosure forms from 2008 aren't due until May, so it will be two months before it is known whether the Obamas decided to stick with this conservative strategy or deployed more of their money in the equity or bond markets.

Assuming the Obamas made no changes last year, they still racked up considerable losses on the riskier portion of their portfolio, which may have totaled up to $660,000 at the end of 2007.

So how did the leader of the free world set up his investment portfolio? President Obama and his wife Michelle bought no individual stocks or bonds. Instead, they purchased a range of mutual funds.

Their largest fund holding at the end of 2007 was the Vanguard FTSE Social Index (VFTSX), which contained between $150,000 and $350,000. (Federal forms only require the disclosure of a range, not the exact dollar amount in each investment.)

No Alcohol and Tobacco Stocks

A low-cost index fund, it is limited to buying only socially responsible stocks as determined by the FTSE Group. That means no alcohol and tobacco firms, nor any companies with suspect environmental or labor records. Some top holdings at the end of 2008 included JPMorgan Chase (JPM), Intel (INTC), and Apple (AAPL).