Wall Street Insiders are Selling Like There is No Tomorrow. Should You Follow Their Lead?
Wall Street insiders are “retiring” from their respective C-level positions. This frees them up to sell their stock options. Should you follow their lead? Is it too late?
So, here are the statistics that you are probably aware of.
And here are the projections, data and predictions that you might not be hearing.
Wall Street Insiders are Selling and Retiring.
That’s only a small sampling of CEOs who are going out on top and/or freeing themselves up to sell stock. Bob Iger boasts of increasing the market cap of Disney five-fold. Hewson rocketed up Lockheed’s shares three-fold. Microsoft is in the trillion-dollar club, along with Apple. Barrick and many other gold miners have had to reduce operations due to the coronavirus.
We’re Already in a Recession
This Time Interest Rates are Starting Out Too Low
The Bailout May Force Banks and Other Companies to Cut Dividends and Buybacks
Prices are Still High
As you can see from the chart below, stock prices are still historically high – even with a 29% sell-off. This is a chart of price-to-earnings ratios averaged over a 10-year period, in the CAPE system developed by Nobel Prize winning economist Robert Shiller.
Robert Shiller CAPE Ratio Chart
March 24, 2020
What This Means for You
Over the next few months, there will be a lot of effort from politicians and policymakers to present a positive spin on everything. This is important for our headspace, and to get the economy fired back up as quickly as possible. This is America, and we are a can-do country.
However, we’re in an unprecedented economic disruption that was preceded by over-leverage that hasn’t been seen since before the Great Depression. The last two recessions cost most investors more than half of their retirement. It took NASDAQ 15 years to crawl back to the highs set in March of 2000. Having a properly diversified and protected portfolio allows you to buy low. Having a poorly constructed Buy & Hope Portfolio could mean that you spend the next decade crawling back to even -- or that you must postpone retirement.
If you wait for the dire headlines that are coming at the end of this month and then again at the end of July, it will be too late to protect yourself. Wisdom and time-proven systems are the cure, and the time to put them in place is now.
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Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.
ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.
Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
Natalie Pace is the co-creator of the Earth Gratitude Project and the author of The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She blogs on Huffington Post and Medium, and is a frequent guest contributor to national news shows and magazines. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.