Crossing the Five-Dollar Line
Individual investors have some core advantages over institutional investors. Among them are that they don't have to engage in contortions like quarter- and year-end window dressing, they can afford to be more patient and can hold a much higher percentage of cash when they are negative on the market and believe it will pullback. Managers rarely can afford that luxury as they are always trying to beat or keep up with whatever benchmark their performance is measured against.
Another key advantage individual investors have is the ability to buy stocks selling at under $5, which many institutions are prohibited to do in their bylaws. One strategy I have employed over the years is finding stocks just under $5 with improving growth and/or valuation stories that have just crossed over their 200-day moving average. I have found many times that once the stock clears $5, it can attract new institutional investors that can push the stock the next leg higher. Two stocks that look interesting right now employing that strategy are below....273 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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