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By Paul Tracy

The truth will make you sick.

Congress is rich. Unbelievably rich. According to data from the Center for Responsive Politics, 249 of the 535 members of Congress are millionaires. That's 47%. By comparison, about 5% of American households are worth more than $1 million.

And until just recently, insider trading laws didn't apply to Congress. They could buy or sell investments based on non-public information they learned from their privileged positions.

As you would expect, that's led to some great returns for Congress' investments. In a study cited by Barron's, members of the House of Representatives beat investors like you and me by 55 basis points a month. That comes out to an extra 6.8% per year.

I don't know which is worse: The fact that insider trading was legal for some of our nation's wealthiest politicians... or that Congress refused to do anything about it for decades.

I even wrote about this problem back in July 2011, after doing research into how -- and in what stocks -- Congress invests.

Then, in late 2011, 60 Minutes -- one of the most-respected investigative journalism programs on television -- dedicated a segment to the issue. Here's a portion of what they had to say...

"In mid September 2008, with the Dow Jones Industrial Average still above 10,000, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were holding closed-door briefings with congressional leaders, and privately warning them that a global financial meltdown could occur within a few days. One of those attending was Alabama Representative Spencer Bachus, then the ranking Republican member on the House Financial Services Committee and now its chairman.

"While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts."

And that was just one example of what was happening on both sides of the aisle.

The report from 60 Minutes led to a frenzy. And a few months after the story aired, the Stop Trading On Congressional Knowledge (STOCK) Act, which curbed insider trading by Congress, was signed into law.

Of course, for many years the rules required all members of Congress (along with some of their higher-paid aides) to publicly disclose information on their finances every year -- including stock holdings.

Thankfully, the STOCK Act strengthened this requirement. Not only did it eliminate insider trading, but Congress must now disclose their trades within 45 days after they happen.

That means we have an opportunity to see exactly what our "representatives" are buying.

But what may surprise you is that the most popular stocks owned by Congress aren't exclusive investments only being bought by the elite.

Take a look...

The table above shows the most widely held stocks owned by Congress in 2010 (2011 data hasn't been published yet). Keep in mind this was before Congress passed the STOCK Act...

As you can see, each stock on the list is a major corporation. So how is it that Congress can earn higher returns owning some of the most well-known companies on the planet?

As I've shown you, it's very likely Congress has helped themselves for years by trading on non-public information. But I think there is likely another reason why Congress is outperforming regular investors...

You see, some of the best returns for politicians, based on their own financial disclosures, come from owning well-known, profitable businesses for the long haul.

Take Representative Lloyd Doggett (D-TX). According to financial disclosure statements, he's owned a stake in Procter & Gamble (PG) since at least May 2000. And he still owned a stake as of his most recent disclosure filed in 2011. In that time, the U.S. experienced two recessions, two wars, and high unemployment, yet Procter & Gamble's total return during that period is over 140%. For comparison, the S&P 500 gained less than 10% during that time.

And it's a similar story with Representative Jon Kyl (R-AZ), who bought shares of Wells Fargo (WFC) in May 2001. He still holds a stake in the company today. Over that span, Wells Fargo has returned about 75% -- despite the problems in the banking sector. That's more than triple the S&P's return of roughly 20%.

Now, there is no definitive answer as to how long the average Congressman holds a stock. But in my research, holding for the long-term seems to be the rule for Congress, not the exception.

And the simple fact is, the longer you hold an investment, the more likely you are to make money.

A recent study by mega-investment firm Oppenheimer showed that the S&P 500 has NEVER suffered a loss in a 20-year period (measured in rolling monthly periods). Their study went all the way back to 1950.

And every one of the six stocks listed above has a positive 20-year return. Cisco returned more than 2,500% over that time. And General Electric -- despite being over 100 years old -- has still delivered a 480% return over the past two decades.

That's not to say every stock will automatically go up simply because you hold for a long time. But owning great businesses -- and letting their returns grow year after year -- looks to be the best way to make money in the market... even if you're a member of Congress.

Disclosure: Paul Tracy does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC owns shares of PG in one or more if its “real money” portfolios.

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Source: The 6 Most Popular Stocks Owned By Congress