Tomahawk, WI 8/22/2013 (BasicsMedia) – If you were to take a look at the stock price of Bank of America Corp (NYSE:BAC) was in 2012 and compare it with the current price, you will notice that there is a 20% increase. Despite this, some hedge funds have dropped it from their portfolio thus leading to a lot of speculation regarding its future and suitability for investments. There are suggestions to the effect that this is purely for profits. But others are of the opinion that this is possibly a result or indication of something more than just a profit making exercise. Let’s look at the reasons for this situation.

You Shouldn’t Ignore What Hedge Funds are Doing

Investors are often alert to what their fellow investors do. Therefore, it wouldn’t shock me to discover that some investors have sold their BAC stock, once they realized or learned that hedge funds had done the same. When hedge funds decide to sell, it could be because they believe that BAC stock is not worth its value. It is also true that they could take such a step if they feel that it gives them the best chance of making some profit and adding on to their portfolio. In recent days, the stock market has been quite volatile, and hedge funds are selling whatever they own.


Image is from

Rarely do private investors do what hedge funds are also doing. They always seem to be taking actions which are the opposite of what the other one is doing. Most investors are classified as retail, or hedge funds or institutions. Pension funds are often included with the institutional investors. When the market was high, private investors or retailers were selling as hedge funds were buying. Right now, the opposite is taking place since the BAC stock is quite low. As a private investor, this is the right time to add BAC stock to your portfolio, while it is down.

Hedge Funds Are Managed By Top Managers

Hedge funds are traditionally managed by some of the top managers in the financial world. This is one reason why you need to borrow a leaf from what they do, and the decisions they make regarding their stock with companies such as BAC. If you develop this habit, you increase your chances of doing better as a private investor than your peers who choose to ignore what hedge funds are doing. Using the behavior of the hedge funds, one can learn to evaluate the trends which are prevalent in the market, and make decisions regarding what to do.

Finally, let me say that not every hedge fund is getting out of BAC, by selling its stock. Each hedge fund pursues its own interest, in just the same way you should as a private investor. BAC is still struggling as a banking or financial institution. Moreover, I would advice BAC investors to note what insiders are doing before making up their minds as to whether to respond to what hedge funds are doing, or ignore everything and continue with personal interests. The general rule, however, indicates that when hedge funds are selling, you should be buying.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.