U.S. stocks have repeatedly been in and out of bear market territory in 2022. The market’s downturn this year can be attributed to an increasing level of uncertainty for investors. Persistently high…
inflation, the economic fallout from Russia’s invasion of Ukraine, and recessionary fears have majorly contributed to the uncertain market environment.
Major stock indices retreated in October and November. The S&P 500 lost gains made over the last week after Fed Chair Jerome Powell indicated a downshift in the size of interest rate hikes. “The Powell pump has been erased,” said Fawad Razaqzada, market analyst at City Index.
Furthermore, the better-than-expected jobs report in November and strengthened activity in the services industry fueled concerns that the Fed will keep raising rates beyond a widely anticipated 5% terminal rate. The Fed’s continued rate hikes will likely tip the economy into a recession by next year.
Amid a volatile market backdrop, tracking insider transactions and trading activities is considered a smart strategy. An insider can be anyone employed by the company, typically an executive, director, or manager, who owns more than 10% of the company’s voting shares. Insiders tend to have better practical insights into a company’s outlook than the average investor due to their active involvement in the company’s affairs.
Peter Lynch, a well-known investor of all time, said, “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”
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