Whether insiders buy or sell often indicates stock direction

The Ticker

November 11, 1998|By Julius Westheimer

WANT TO KNOW what stock to buy or sell? "Companies often 'tip off' investors off in many ways," says Black Enterprise magazine. "One example is insider trading. Top executives know what's going on. If business is good, they'll snap up their stock. If things look rocky or their stock looks overpriced, they'll usually sell shares."

The article advises watching for positive signals such as dividend increases, stock splits and corporate buybacks.

"A buyback is often a sign that management feels its stock is a bargain. And a company that buys back its shares has less stock floating, cutting supply relative to demand."

Should you buy mutual funds or individual stocks? "Even if you're a stock investor, mutual funds could also prove valuable," says Marcia Glover, FMB Trust. "Many investors now realize mutual funds could be their best long-term investment. Funds offer large and small investors diversification and professional management."

Do you follow the crowd? "Have the courage to act on your own convictions," says Dick Davis Digest.

"Wall Street is the only place where things get more popular as they get more expensive. The 'herd' mentality says if a stock is rising, it's worth buying. Follow the herd and you'll get trampled."

Pub Date: 11/11/98

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