| Coattail
Investing |
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An investment strategy where investors mimic the trades of well-known
investors, whose purchases are usually large and often reported in
the news.
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This
copycat investing may seem good - why not follow the best? It really
is not a good investing strategy because by the time a coattail investor
finds out about the well-known traders latest move it is usually too
late. The reasons for buying the stock may no longer exist and the
stock may be poised to fall just as the coattail investor hears the
news and buys in. |
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Dictionary
