Should you follow insiders into stocks?

Before you rush in to investments on the basis that ‘insiders’ are buying, bear in mind three crucial tests, says Tim Bennett.

Stockmarkets have been in defensive mode since Federal Reserve chairman Ben Bernanke hinted that quantitative easing (money printing) might be coming to an end. Yet, as Mark Hulbert notes on Marketwatch.com, "the recent actions of certain corporate insiders provide reasons for hope".

However, he warns that before you rush off to buy stocks, you have to make sure you know which insiders are doing the buying.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.