Hitch a Ride with Institutional Investors
By Saghir Aslam
Irvine , CA

(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)

At a monster truck rally, there are the monster trucks and the little cars they crush.

It’s better to ride in the truck.

In much the same way, big institutions dominate the stock market. When mutual funds, banks, insurers and pensions pile into a stock, they drive it higher. They have power.

Follow their lead and you’re likely to proper. Get in their way and you’ll be totaled. Time it properly and InshAllah you will win.

You need these heavy hitters’ buying power. That’s why it’s crucial to know if they’re building positions in a stock you own or are thinking about buying. Find out where they are putting their money.

A rating of A or B indicates net buying by institutions. Check Investors Business Daily.

Institutions have brains as well as brawn. They have teams of researchers to uncover the best stocks. If mutual funds-especially the best ones-are buying a stock, it’ll likely do well. ?? will appreciate because of their buying power.

Almost all great stocks have at least one mutual funds rated A-or better just before they break out. The Institutional Sponsorship Rating is in the stock tables every Tuesday and in the weekly charts of “NYSE Stocks in the News” and “Nasdaq Stocks in the News,” in Investors Business Daily.

Institutional backing props up great stocks when they’re correcting and then propels them to new heights. When a stock breaks out, volume should be at least 40% to 50% above its 50-day average. That indicates big institutions are driving up the price.

(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr. Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, or does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr. Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr. Aslam does not have anything for sale.)

 

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Editor: Akhtar M. Faruqui
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