Corporate Insiders Flash Bearish Signal Not Seen in 20 Years
Executives and directors are selling at a pace unseen in over two decades. Here's what that means for your portfolio.
Pay attention. The people who know their companies better than anyone — corporate insiders — are sending a warning you haven't seen in more than 20 years. That's not noise. That's a signal worth respecting.
Insiders buy and sell stock all the time, but when the collective sentiment swings this hard toward bearish territory, traders take notice. These executives and directors have access to forward-looking data the rest of us don't. When they're this reluctant to hold their own shares, you have to ask yourself: why?
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This level of insider pessimism hasn't shown up since the early 2000s — a period that preceded significant market pain. History doesn't repeat perfectly, but it rhymes loudly enough to warrant a defensive posture right now. If the smartest money in any given company is heading for the exits, you probably shouldn't be rushing in the front door.
That doesn't mean you panic-sell everything in your portfolio tonight. What it does mean is that now is a smart time to reassess your risk exposure, trim positions that have run hard, and make sure you're not overextended in names where insider selling is concentrated. Use this signal as a gut-check, not a guarantee.
The market can stay irrational longer than you can stay solvent — but ignoring a 20-year extreme in insider sentiment isn't a strategy, it's wishful thinking. Stay sharp. Continue reading at MarketWatch.com.
