Bottom fishing in stocks
The strategy of bottom fishing or buying low in the stock market seems to be human nature. Based on this innate investor orientation Investor Boot Camp is conducting a study to determine if there is statistical validity to buying depressed stocks and whether it provides for out performance.
Leading stocks that have fallen under their 200 day moving average (long term trend line) are being compiled. Specifically, price must undercut the 200 day moving average to qualify. Price performance periods of one month and one year, from the low, are being used.
Exclusions; bio-tech stocks.
We will be presenting an overview of the study here so investors may see what it looks like in progress. Some of the price performance analytics are shown here. The results may provide investors with information on the nature of stock behaviours and how it may impact decision making. Our analysis with possible conclusions will be provided in the future as more data is collected.
To date not one stock has established a new low (at one month). One factor to be aware of is the stock market has been in an up trend during the study period. On average the gain, one month from the low, was 22.58%. The average decline below the 200 day m.a. was 21.58%.
For investors who manage their own portfolio
Investor Boot Camp conducts real time and historical studies for the purpose of objective evidence based input in the investment management process. Study results are incorporated into a systematic markets analysis and portfolio management process. Investors who manage their own portfolio use the research and portfolio guidance to maximize performance while minimizing risk, especially unnecessary risk.