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  • ooli3@sopuli.xyzOPMtoWaltstreetbets@sopuli.xyz•Trump made 21,000 trades last year. Here's one way you can trade like the president.
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    2 days ago

    The investing strategy behind President Trump’s 21,000 trades Alex Nicoll 11–14 minutes Trump made 21,000 trades last year. Here’s one way you can trade like the president.

    By Alex Nicoll

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    Donald Trump figurine on the trading floor of the stock exchange. A Donald Trump figurine on the trading floor. TIMOTHY A. CLARY / AFP via Getty Images

    Trading like President Donald Trump might be as easy as buying a customized index fund.

    Trump made 21,000 trades in 2025, a volume higher than any other president, and likely any other politician. He generated more than $2 billion in income (including $1 billion in cryptocurrency income).

    The Trump Organization has said that Trump’s trading is automated. Investors and financial advisors say Trump could be part of a growing group of investors using direct-indexing strategies to capture the returns of an index while also reducing their tax bill.

    Direct indexing grew to $864 billion in assets as of the end of 2024, according to Cerulli Associates, more than double its size in 2020, as technology has made it cheaper to run these strategies for everyday investors.

    Alex Michalka, vice president of investment research at Wealthfront, which credits itself with coining the term “direct indexing” in 2012 and oversees $99 billion in client assets, said that one medium-sized direct indexing account on the platform made over 4,500 distinct trades in large-cap companies in 2025 in order to increase tax savings.

    Trump’s disclosures showed eight distinct accounts, most of which trade equities. If they all traded evenly, that would be more than 2,500 trades per account. Democratic lawmakers, including Elizabeth Warren, are now asking for information about who manages the president’s accounts.

    A Trump Organization spokesperson wrote that the latest request from Democratic lawmakers is “just another baseless political stunt,” and pointed to reporting by other outlets showing the president’s accounts are managed by independent third-party managers.

    Trump and his circle don’t have the ability to influence the investments, the spokesperson said, in order “to avoid even the appearance of a conflict of interest.”

    We spoke to experts to learn more about direct indexing and which investors should investigate or avoid the strategy. What’s direct indexing

    Direct indexing is an evolution of index investing, the way the vast majority of investors access the market. Instead of buying a single ETF that tracks an index, investors own the underlying stocks directly, allowing them to trade individual names while still roughly mimicking the index performance.

    The key to the strategy is “dispersion,” Michalka said, effectively the difference between individual stock returns and an index’s overall performance.

    Markets generally go up, but that performance is not uniform.

    “Even if the market as a whole is up, there are going to be some stocks that are down,” he said.

    ETFs bundle those gains and losses together, but by trading the individual stocks, an investor can claim the losses against their capital gains in the fund or from other sources. (They’re also able to claim $3,000 against their W-2 or other wage income if losses exceed gains in a given year).

    Those written-off taxes are then deferred until the investor liquidates the portfolio, allowing them to reinvest those additional savings in the meantime.

    This strategy used to be available only to the rich, said Gabriel Shahin, a financial advisor who founded the advisory firm Falcon Wealth Planning.“We wouldn’t even look at it unless we were managing at least $5 million for them,” Shahin said, citing high management costs, the costs of individual trades, and the lack of fractional shares as reasons the strategy was restricted.

    Over the past five or so years, direct indexing has grown substantially, he said, as more seamless financial plumbing, free trades, and technology that can automate much, or all, of the strategy, means that it’s in reach for regular investors. Prices for some products have come down in line with the most popular ETFs, with Wealthfront’s S&P 500 direct-indexing product carrying the same fee as State Street’s SPY ETF. Other products are more expensive but offer intraday trading and rebalancing.

    Fractional shares that can trade down to six or seven decimal points also lower the cost of the strategy. It’s customizable, allowing investors to adjust their index holdings based on their environmental, social, or governance preferences, such as excluding oil and gas investments, or to avoid positions they already own a lot of, like a tech employee who gets a sizable percentage of their income in their company’s equity.

    The investing strategy is growing rapidly, and in recent years has become almost table stakes. Shahin said he uses it with many of his clients. Who it’s for

    Trump is “the perfect candidate for direct indexing,” Shahin said. He’s in the top tax bracket, has lots to save on his taxes, and, as a real estate investor, has capital gains to write off and a need for liquidity.

    While the strategy appears to be working for a growing number of investors, it’s “not a free lunch,” said Michalka of Wealthfront.

    Fees from some providers can be much higher than many ETFs. There’s also the specter of tracking errors, or the dispersion between a product’s return and the index it tracks as a result of the tax saving, Michalka said.

    Michalka said that his firm’s analysis shows a small, roughly 1%, tracking error on their own products, though that can be higher in volatile years, like 2020, or if the portfolio is customized away from the index.

    “You might read about this and say it’s great for me, but you need to analyze your situation,” said Shahin.

    Factors that make it worth considering:

    Enough capital gains income that's worth writing off, especially if you are a tech worker paid with shares of the company you work for or a real estate investor like Trump.
If you have a long time horizon for your investments, it gives you time to reinvest the deferred taxes.
The ability to continually contribute money to the account. The investment has a diminishing tax benefit over time without fresh capital.
If you want to modify investments to avoid certain companies for ESG, religious-exemption, or diversification reasons.

    Factors that may give you pause:

    Investors who expect their tax rate to rise. Deferring taxes is more valuable if you expect to pay a lower rate when you eventually sell, such as in retirement. If you expect your rate to be higher, the strategy may be less worthwhile.
You're investing a smaller amount of money. The tracking errors will likely be higher because of the constraints of fractional shares.
You're saving for a down payment or other big purchase in the short term. Any tax savings are not worth the risk of putting money that you will soon need into the risky equity market.
If it's too busy or complicated for you, you might prefer to buy an index: "$SPY and chill," Shahin said.
Not all providers are equal. There's the cost, but non-institutional providers' trades could be less prioritized or may be more costly, which can increase tracking errors.
Be careful about leveraged direct-indexing products, or long/short portfolios, that follow similar strategies but increase the leverage and therefore, the risk.

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