This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Active Investors Favor A Qualitative Approach To Managing Their Portfolio

E*TRADE Financial Corporation (NASDAQ:ETFC) today announced results from the most recent wave of its quarterly self-directed active investor tracking study.

  • By a two-to-one margin, active investors use fundamentals as their primary method of valuing a security over technical indicators (54% v. 25%), and advice from others (21%).
  • When asked which resources are most helpful in researching investments, 55% chose earnings reports, followed by price charts with 37%, and P/E ratios with 36%.
  • Channels and trend lines, volume, and stochastics were some of the least helpful, with 23%, 22% and 11%, respectively.

“When push comes to shove, active investors use fundamentals over technical indicators,” said George Fischer, Vice President of Trading, Margin Lending and Cash Management at E*TRADE. “That said, having more tools in your toolbox is better than having fewer — and in building a portfolio you want to use them together. It’s like the old saying ‘measure twice; cut once.’ If you study a security through both fundamental and technical lenses your chances of making the right decision will only increase.”

Several data points also suggest that experienced investors prefer not to adhere to the rigid principles advocated by technical analysts and traders:

  • When purchasing a stock, only 21% have an exact idea of their target price for selling a position, with 67% having a general idea, and 13% having no idea.
  • More than half – 53% prefer to monitor their position and sell when the market conditions are right, as opposed to setting limit orders (26%) or trailing stop losses (21%).

“In speaking with active investors we find that success comes from being both methodical and thoughtful,” continued Fischer. “Methodical in that they have a defined trading strategy, and thoughtful in that they study their investments closely in order to enter and exit a position at the right time.”

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs