When it comes to investing in the stock market, there is something that can be said about being a good investor that involves understanding what the company executives do. It is important to know the business model and who is responsible and what decisions they make. Their decision making in the company plays a large role in the company’s long-term performance, as well as the return performance of your investment.
What are the executives doing?
Executives do many things that may be insider information or available to the public. Maybe an executive is preparing to sell his shares or maybe the board members are in agreement on issuing more shares. Reed Hastings’s Net worth for example on Netflix has shown evidence that he has a lot of shares and that he might feel that he might want to throw away some things at several points.
Good to know the background of executives
It is good to know the background about public finance available at the company to anticipate what they might do with the shares they have. Maybe the CEO applies a new business decision that you might like more or oppose that can affect how much and if you want to invest in the company slot terbaru. Also, if there are changes in management, you might want to know this and you might really like the current leader or become very concerned about new leaders.
Do your research
Research on company executives is important because stock prices tend to have much volatility in the market. Although there are many external forces that can move prices such as daily traders and various analysts making projections, the behaviour of the company, especially with traders in tribes can actually move prices more than traders. Some of these are a large number of shares owned by people inside, but more so they can start a chain reaction to other investors whether it bought or selling.
Watch the price of the stock
As a shareholder, it is important to always be above the stock price and if it is in a vulnerable position for you to sell before people in selling or vice versa. Suggestions for long-term investors are that as long as you believe in the company and believe that the long-term return is intact, you do not need to overreact to the internal trade. If you have a lot of shares, you can always trim again when you feel the stock is considered too high and always returns after the retreat, especially if it is with the behaviour of insiders.
If there is nothing else, even if the company executives do not necessarily buy or sell the shares of insiders, it is always important that you monitor their behaviour as a business model servant.
How does the company do business?
It is important that when you invest in the company that you have done research by understanding how companies do business, monitor their financial statements, and ensure frequently that the thesis you hold in the company is still intact makes you still want to be invested.
Therefore when a company executive announces something that changes the thesis or financial statements, does not support future direction and anticipates returns, you must be ready to make a decision, whether it bought more shares, sell shares, or continued to survive.
If you don’t need to have time or access to information at the company where you invest, be sure to rely heavily on news articles or other analysts that include shares. This entity may have more access to people than you and can provide information that you might not have or may not have time to be reviewed.
What do the analysts say?
Analysts will often update information, assess whether the stock becomes too hot and the executive prepares to cash, or if there is something in their mind which makes stock buy, sell, or hold. However, you can always keep an eye on your investment when continuing your life. Become a diligent investor, you don’t always have to react to people’s behaviour and can continue to be invested in the company as long as you have all the information needed in front of you.