We all know how poorly individual investors do in the markets. Just look at any Dalbar study and you’ll see just how most investors don’t come close to achieving market returns.
One reason (but not the real one) why investors perform so poorly
Market structures are part of the problem. For years, it wasn’t Wall Street with its capital source, individual investors. It was Wall Street versus individual investors.
Selling is Wall Street’s essence just as surely as buying is Main Street’s. Wall Street almost never tells you to sell (The Indomitable Investor by Steve Sears)
It’s almost as if brokers and their clients were pitted against one another — brokers sold when their clients bought.
The real reason investors struggle
But, that’s not the main reason investors stink up the joint.
Continue reading “The biggest problem with investment strategies”
Insider trading has been top of mind for the past few months with Galleon and Congressional insider trading blanketing the news. While illegal insider trading is being taken to the woodshed, there’s plenty to do with legal insider trading. By following the smart money, investors can follow the cookie crumbs back to the investing profits.
So, here are 12 ways investors can use insider trading data and information to make better, smarter, investment decisions.
Continue reading “12 ways investors can profit via legal insider trading”
Insider trading (talking about legal insider trading, of course) typically beats the stock market by 10% — per year.
For those of you who’ve been following Tradestreaming for the past couple of years (and read my book), you know that I’m a fan of following the smart money.
By following the tradestream of hedge funds or the activity of corporate insiders, investors can create portfolios and strategies that have at least been proven in the literature to make money.
Insider trading is a treasure-trove of potentially-profitable information. Top managers at their firms are in the best seats to determine the future prospects for their stocks. If they reach into their wallets and buy their firms’ stocks, well, that’s an incredible useful signal.
An insider trading blueprint
There’s been some amazing research into insider trading. Recent studies have found that investors can mimic the returns of insiders to beat the market by 7 – 10% a year.
I wrote the 20+ page, The Harvard Guide to Insider Trading to describe these strategies and provide a quick blueprint to create portfolios comprised of the most useful insider trading.
AND, to teach you how to use insider trading strategies for your own trading/investing.
You can download it freely here.
I hope you like it — let me know (via email or in the comments) what you think.