Stock Market Today

Another strategy for investing involves looking out for what insiders  at a company are doing with their stock. Keeping an eye on insider trades can be useful because it allows you to see what the people  who have a large stake  in a company are doing with their stock. These insiders are often the ones who know what is going on at the top levels of their company, and so they may have the best information  about whether a company’s stock is actually worth more or less than the current price. Insiders can be either individuals or corporations. They are required  to report  both direct holdings (which are held in the name of the insider) and indirect holdings (which are controlled by the insider but are held by a family  member, trust, company plan, or corporation  with which the insider is affiliated). Note that we’re not talking specifically about illegal insider trading (that is, insiders who are trading based on privileged information), but instead about all types of insider trades, including when no such privileged  information exists, but the insiders are just generally confident about the company’s outlook.

Other Investing Strategies

Constant Ratio System: Unlike the constant dollar system, the same percentage of funds is

divided between different assets. When the balance is upset, it is periodically restored by moving money from overperforming assets to underperforming ones. This system prevents one asset class from dominating the portfolio. This is one way to maintain a desirable asset allocation.

Variable Ratio System: This is a variation on the constant ratio system that relies on market timing to shift the proportions of the various asset classes contained in the portfolio. Buying low and selling high is built into this strategy, but, like the constant dollar system, prolonged movements in a given direction will harm returns.

Bottom-up Analysis: This is a name for an investing strategy that focuses on the fundamentals of individual securities as opposed to the state of the overall economy.