Investing Know-How

An Investor's Guide to Corporate Insider Trading Activity

Are the corporate insiders buying or selling? That's a relevant question for every serious student of the stock market.

One of the most important tools of fundamental security analysis is knowing how the insiders feel about their own shares.

Over time, insider purchases and sales have been fairly good predictors of future stock performance. Since insiders have access to crucial information not generally available to the public, it makes sense to monitor how they act toward their own shares. While not foolproof, studies have shown that insiders have fairly good results in buying and selling their own shares.

Who Is an Insider?

An insider is defined by the Securities and Exchange Commission (SEC) as an officer or director of a public company or an individual or entity owning more than 10% of a company's stock. Take a look at the firm's annual report, 10K or proxy to identify the insiders.

Insiders are required to report their transactions in the company's shares to the SEC. These filings...

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State-Based Exchange-Traded Funds

Update: The exchange-traded funds highlighted in this article were liquidated at the end of 2010.

Exchange-traded funds (ETFs) are continuing to prove themselves as ever-present and almost chameleon-like in their ability to take on many new forms as a perceived need arises. The latest additions to the ETF world are state-based ETFs.

How It Works

Exchange-traded funds are portfolios of securities that are usually...

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