Corporate insiders ARE selling. Should you?

Retirement, Income, Tax & Estate Planning.

Corporate insiders ARE selling. Should you?

March 20, 2014 Investing Newsletter Retirement Planning Stock Market Uncategorized 0

Who knows more about what is happening to a company than the executives of that company? The answer is, of course, no one. Given this thought, doesn’t it make sense to pay attention to whether this group of insiders are buying or selling their own company stock? You bet!

For example, company executives were selling their own company stock like crazy near the end of 2007 and very few were buying. If you were paying attention to this, you would have gotten out of stocks and avoided the 2008 crash.

Here is the scary news today. These same executives are selling at the same rate they were at the end of 2007 (Click here for article)

Does that mean that they will be right again?  If they are right again, will the market crash like it did in 2008?  And when exactly will this potential upcoming crash happen?

A second article in last weekend’s Wall Street Journal goes into more detail.  The Inside Scoop: Officers and Directors Are Bearish explains how powerful this indicator of future market performance can be. 

These are all questions with answers that are, of course, unknown, unless you have a working crystal ball that accurately predicts the future. For dummies like me who spent $22 for a non-cloudy crystal ball from Amazon, hopefully next time you’ll read the fine print like I should have. For the rest of you, start guessing.

As the “Journal” article says, pay attention and be ready to exit stocks quickly when they start to fall. Remember, we haven’t seen a bear market in 5 years now.

Peter Signature

Your Retirement Quarterback®

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