A few months ago, we watched bankers flood financial media with advice to “buy banking stocks” because they were performing so well as the Fed jacked up rates and crushed growth stocks. Many of us in target plans saw our fund managers rebalance our portfolios at the worst possible time, while growth funds were low and “safe and stable” banking stocks were high. So, when the bankers liquidated their freely granted shares onto us, and then the banks started their collapses, our 401Ks and pension accounts took a huge hit.
I've been contemplating how to recover from that, and really I don't see any way to do it with funds that fund managers control. BUT, it all had me wondering. Fund management companies wield billions upon billions of dollars for millions of people approaching retirement and already in retirement. A portion of our earnings goes to these guys, and they steadily, routinely, on some schedule, buy huge blocks of shares for us. Or they sell, for us. In the case above, it was fairly devastating, at least for workers. It was awesome for executives. Anyhow, I wondered, can the little people buy and sell prior to these movements. For example, if you know that your fund management company buys 10 millions shares of some stock each week on Friday, that could cause a good spike. As a retail investor, you stack shares before they do it, and then sell during their acquisition. Obviously, the big players know these trends and definitely are using them to their advantage, but is this information available for the little people? Just looking at my retirement accounts and it's going to take at least 10 years for me to recover from that mess, unless I can find some better ways to save and manage my investments myself.
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