Smart Advice. Simply. Clearly.

Keep an Eye on Buying & Selling by Corporate Executives
A look at “insider” trading.

Provided by Hilltop Wealth Solutions

To some, the buying and selling of a company’s stock by corporate officers and directors can be an indicator of Wall Street sentiment.

In July 2020, the ratio of companies with executive buying compared with executive selling touched 0.27 – the lowest level in nearly 20 years.1

By contrast, the ratio set an 11-year high of 1.75 in March 2020.1

Corporate officers and directors are referred to as “insiders,” so you’ll often see this reported as “insider trading” by the financial press. But it’s critical to know nothing is wrong or illegal with this type of buying and selling.

“Insider” buying can indicate executives are confident in their company’s outlook and believe purchasing stock may be a sound investment decision.

“Insider” selling, on the other hand, can indicate executives want to pursue other opportunities and are choosing to sell some or all of their company stock. Keep in mind that executives have many restrictions on when they can sell or buy shares, including the time before and after a quarterly report, for example.

Investing involves risk, and the return and principal value of investments will fluctuate as market conditions change. Investment opportunities should take into consideration your goals, time horizon, and risk tolerance. When sold, investments may be worth more or less than their original cost. Past performance does not guarantee future results.

To add a little perspective, you can expect more executives to be sellers than buyers over the long term. Executives are often rewarded company stock as part of their overall compensation, so selling shares allows them to realize a portion of their total pay package.

Insider trading activity is one of many indicators that financial professionals watch to get a perspective on the financial markets. This trend can offer some insight but also has limitations. If you see any indicator that piques your interest, give us a call. We’d welcome the chance to hear your perspective.

Hilltop Wealth Solutions may be reached at 833-899-7526  or hilltopwealthsolutions.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

  1. CNBC.com, July 24, 2020

This article was researched and written by the staff of Hilltop Wealth Solutions. It is one of many that are published on our website at hilltopwealthsolutions.com.

For more information on this article contact
Tim Ceravolo at 574-675-9277 or 574-889-7526

574.889.7526 | toll free: 833.889.7526
fax: 574.889.5392

email: info@HilltopWealthSolutions.com www.HilltopWealthSolutions.com

Smart Advice. Simply. Clearly.

Keep an Eye on Buying & Selling by Corporate Executives
A look at “insider” trading.

Provided by Hilltop Wealth Solutions

To some, the buying and selling of a company’s stock by corporate officers and directors can be an indicator of Wall Street sentiment.

In July 2020, the ratio of companies with executive buying compared with executive selling touched 0.27 – the lowest level in nearly 20 years.1

By contrast, the ratio set an 11-year high of 1.75 in March 2020.1

Corporate officers and directors are referred to as “insiders,” so you’ll often see this reported as “insider trading” by the financial press. But it’s critical to know nothing is wrong or illegal with this type of buying and selling.

“Insider” buying can indicate executives are confident in their company’s outlook and believe purchasing stock may be a sound investment decision.

“Insider” selling, on the other hand, can indicate executives want to pursue other opportunities and are choosing to sell some or all of their company stock. Keep in mind that executives have many restrictions on when they can sell or buy shares, including the time before and after a quarterly report, for example.

Investing involves risk, and the return and principal value of investments will fluctuate as market conditions change. Investment opportunities should take into consideration your goals, time horizon, and risk tolerance. When sold, investments may be worth more or less than their original cost. Past performance does not guarantee future results.

To add a little perspective, you can expect more executives to be sellers than buyers over the long term. Executives are often rewarded company stock as part of their overall compensation, so selling shares allows them to realize a portion of their total pay package.

Insider trading activity is one of many indicators that financial professionals watch to get a perspective on the financial markets. This trend can offer some insight but also has limitations. If you see any indicator that piques your interest, give us a call. We’d welcome the chance to hear your perspective.

Hilltop Wealth Solutions may be reached at 833-899-7526  or hilltopwealthsolutions.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

  1. CNBC.com, July 24, 2020

This article was researched and written by the staff of Hilltop Wealth Solutions. It is one of many that are published on our website at hilltopwealthsolutions.com.

For more information on this article contact
Tim Ceravolo at 574-675-9277 or 574-889-7526

574.889.7526 | toll free: 833.889.7526
fax: 574.889.5392

email: info@HilltopWealthSolutions.com www.HilltopWealthSolutions.com

Website Disclosures

Hilltop Wealth Solutions (“Company”) is an SEC registered investment adviser located in Mishawaka, IN with branch office located in MI and other locations throughout IN.  The Company may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.  The Company’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links.  Accordingly, the publication of the Company’s web site on the Internet should not be construed by any consumer and/or prospective client as the Company’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.  Any subsequent, direct communication by the Company with a prospective client shall be conducted by a representative that is either registered or qualified for an exemption or exclusion from registration in the state where the prospective client resides.  For information pertaining to the registration status of the Company, please contact the SEC or the state securities regulators for those states in which the Company maintains a notice filing.  A copy of the Company’s current written disclosure statement discussing Company business operations, services, and fees is available by going online via the SEC’s Investment Advisers Public Disclosure (IAPD) database at www.adviserinfo.sec.gov, using SEC #801-115255.

The Company does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to the Company web site or incorporated herein and takes no responsibility, therefore.  All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by the Company, will be profitable or equal any historical performance level(s).

Certain portions of Company web site (i.e. newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, the Company (and those of other investment and noninvestment professionals) positions and/or recommendations as of a specific prior date.  Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s).  Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from the Company, or from any other investment professional.

The Company is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice.

Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if the Company is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed as a current or past endorsement of the Company by any of its clients.  Rankings published by magazines and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.  Rankings are generally limited to participating advisers.

To the extent that any client or prospective client utilizes any economic calculator or similar interactive device contained within or linked to the Company web site, the client and/or prospective client acknowledges and understands that the information resulting from the use of any such calculator/device, is not, and should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from the Company, or from any other investment professional.

Each client and prospective client agrees, as a condition precedent to his/her/its access to the Company web site, to release and hold harmless the Company, its officers, directors, owners, employees and agents from any and all adverse consequences resulting from any of his/her/its actions and/or omissions which are independent of his/her/its receipt of personalized individual advice from the Company.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.