What You Can Learn From Insiders Buying and Selling Activities to Become a Smarter Investor

    Many investors had to learn the hard way when they first traded securities and lost their money. Most of the time it is because they did not do their due diligence before the purchase and take the time to educate themselves.

    One thing an investor is watchful of is the behavior of insiders buying and selling transactions of a company they hold ownership of. For a lesson, if you want to invest in Facebook and need information about the insiders selling or buying patterns, you can simply visit Investors use sites, such as Insider Trades, to learn if directors, chairpersons, and key executives of corporations sold or purchased shares.

    Insiders Most Recent Sells and Buys In April

    Facebook’s CEO, Mark Zuckerberg, sold shares of his stock on April 9th, 12th, and 14th of this year. He sold 204,000 shares totaling $63,042,120, the most frequent seller in April. Another shares seller is Jerome Guillen, an insider of Tesla, selling 10,000 shares at a transaction total of $6,978,700, with shares held after the sell at 60,588. The only buy transaction Insider Trades reported the first half of the month is of Paul Manning, the Director of Liquidia Company. He purchased 198,413 shares for almost $500,001, with 111,706 shares held after the transaction.

    While insiders’ buy and purchase transactions are helpful for investors to gain knowledge about a particular company’s stock, there is other information they seek. A smart investor examines the company’s financial statements and reads the latest news pertaining to stocks of interest. He or she may study the trends and other statistical data to make smart decisions about purchasing new or additional shares of stock. Investors use various tools and strategies to help them manage their assets and reduce risks involved in the stock markets.

    Ways You Can Take Control of Your Finances

    First, create a budget by recording all your monthly expenses and income. You can do this by investing in economic accounting software to record your expenditures and earnings frequently. It will provide insight into the things you need to do to save your money and invest in your future.

    For the investor who recently invested and knows little about investment strategies, create an investment budget. It is helpful as a guide to help manage how much you can afford to invest regularly and reach your financial goals. You can use it as a tool to monitor your investments and diversification. The best way to take control of your finances is to understand your financial means and avoid living above them. If you need to reduce expenses to save more money, consider it and make a commitment to yourself to invest in your future.

    Free Online Resources for Investors to Access Insiders’ Trades and Report Filing

    When insiders purchase stock shares, they believe the price will eventually rise over time. There are a variety of reasons an insider may choose to buy or sell a stock. SEC says it is legal for investors to capitalize on insider knowledge when they use public databases to track the buys and sells of owners, management, and officers. To classify as insiders, they must have over ten percent of the company’s class security, based on the Securities Exchange Commission’s rules and regulations.

    Below is a list of online resources that are free to the public to access information and data about a company stock:

    • SEC is the most preferable reliable internet resource to gain information about a publicly-traded company and some OTC stocks. You can access Edgar database on the site to discover filings relating to an insider buying and selling of stock shares. Insiders must file SEC forms each time they buy or sell shares of stock
    • A Google search using the keywords, insider reports, will bring up a list of insider buy/sell sites to find the company you are investing in. A few examples are Guru Focus, J3SG, and Finviz

    Insider buying and selling activities will contribute to your overall investment strategy for controlling and managing your assets to minimize risk. What an investor learns is the behavior of selling or buying shares of stock. An example could be a transaction involving an insider selling most or all their shares, when the prices are high and repurchasing the same stock again before the six-month rule.