When to Sell and Nail Down Your Profits—While You Still Have Them

When you go through a complete market cycle—from the start of a new bull to the bottom of the next bear—your real objective is to nail down as much of the profits you’ve built as possible. But most investors give back more of their profits than they should, and too many give back the whole…

 

Why Technical Analysis Matters

Technical analysis is a bit of a misnomer since it is really not that technical. A better name for the use of charts to make investment decisions might be risk/reward analysis or even market psychology. Sure, there are some complex mathematical concepts involved with some of its more esoteric indicators. But at its core, technical…

 

How Impactful Are Changes in Analyst Ratings?

Before you give into any temptation to follow analysts’ recommendations, consider this conclusion from three researchers: “On average, analysts’ revisions are not highly correlated with subsequent long-run returns, indicating that analysts do not provide new information that is relevant for the long run for typical investors.” The finding is from an appropriately named paper published…

 

A Look at Relative Strength Measures

Just as a rising tide lifts all boats, a rising market tends to lift all stocks. Well, almost all stocks. Upward price individual stock performance during a strong market may represent only average performance while a minor stock price decline during a major bear market represents strong relative price performance. Price momentum is normally measured…