The stock market In recent years has shown negative dynamics, but the indicators are unpredictable. Not every financial manager in such a situation is able to react quickly in order to sell falling assets correctly and on time. Stocks indices cannot overcome the indicators for many years. However, people who are engaged in buying and selling securities do not react quickly to changes in the stock market in time. For financial managers buying interesting in terms of profit securities is much better and faster than selling those that are unlikely to be profitable.
What stocks are worth selling
The Inalytics company conducted an anonymous study of the behavior of stock pickers, tracking their daily actions regarding the purchase and sale of securities. About 800 professional financial managers participated in this research, managing more than 570 million dollars.
What revealed the conducted research? Why do people who have a lot of experience, who are professionals in the field of finance, in particular, what stocks are worth selling, choosing and buying do not act fast enough and allow stagnation in non-profit stock portfolios?
It’s all about manager’s thinking. Most often, stock pickers think first of all about replenishing their investment portfolios with new interesting assets. This activity takes up most of their time and resources, and they see the sale of shares as another process, the process of collecting money. Stock pickers are focused on acquiring stocks that they believe are promising in terms of their future price increases. Selling is a secondary process for them.
However, we know that stocks that fall in price while remaining in a portfolio can cause significant financial damage to investors if they are not disposed of in time. The volatility of some securities and the entire stock market as a whole in recent times does not allow even experienced and seasoned investors to relax. No one can say with certainty when the respite in horse racing, outlined over the past few sessions on the stock exchange, will end.
Brexit and its consequences limit the growth of securities on the stock exchange, and also create a greater likelihood of many of them falling and causing significant fluctuations in the stock market in general in the coming weeks.
Is there a solution to the problem?
In managing funds, random fast strategies do not always show high efficiency and careful research of the situation is very important here. New up-to-date information that appears can turn indices in the opposite direction, which becomes obvious, and financial managers are able to make an informed decision on the sale of shares. This process is similar in this respect to the process of deciding on the purchase of new securities when replenishing the investment portfolio, which is usually also made on the basis of information obtained as a result of careful research.
What to expect next
The US government has temporarily suspended its work for the longest time possible in the last 40 years. The record was due to a bipartisan transaction on expenditures that was not signed, and it seems that it has not made any progress on this path. Democrats did not support the allocation of funding for the construction of the wall on the border with Mexico, to which President Trump responded that he could impose a state of emergency if the parties did not come to an agreement.
Information that is expected next week from Washington and Wall Street does not imply any particularly strong changes. Data on the US economy with a temporary suspension of government work will most likely not have a significant impact on the indices. Depending on the events that will occur in Washington, the government will have inventory numbers for the enterprises and retail sales. Manufacturers will still provide a price report on Tuesday, as well as a report on manufacturing activity in Empire State, and further views will be turned to the US capital.
Investors will then await data on the Philly Fed index, which reflects general production trends, as well as information on the number of applications for unemployment benefits, while construction permit data may be delayed until the government’s shutdown situation clarifies, as well as about the amount of new housing.
Then on Friday we will see some results of the week concerning industrial production. In addition, the University of Michigan will prepare by that time information about consumer sentiment. All of these data will make it possible for financial managers and independent investors to make a decision when buying or selling securities after some analysis of the information received.
The process, initiated two years ago, is finished, but still affects the stock markets. Many investors are already taking some actions with the shares.