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Co-Wise: Do you trade the news? Why, or why not?
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Oh, the news… PROCEED WITH CAUTION!

I think we can all agree that we have a love-hate relationship with the news!
Press releases and other forms of news events are a good way for companies to get some level of public exposure. Something noteworthy has occurred and the world should know about it. If a particular news report highlights a company that seems interesting to me personally, I’ll consider adding it to my watchlist. I tend to dig a little deeper and learn more about the company before committing to purchasing stocks.
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When I first got into investing, I was a bit naive into buying into the news, but I quickly learned that’s not always the best option. **looking at you, $Sorrento Therapeutics (SRNE.US)$ **
Luckily, I was able to claim some good gains before the stock price plummeted.
It’s better to get to know a company before adding wildly based on a news report. In general, I’m grateful for staying on top of the news and seeing what changes are happening with the economy. It helps to make sense of why the market is moving up or down when you read about what’s going on. I try to focus on long-term growth, and while the short-term volatility isn’t something to worry about when you’re looking at the big picture, it’s good to know where the economy and the market are heading so I can make sound decisions when it comes to investing for the long run. I became aware of some companies like $MP Materials (MP.US)$ , $Vale SA (VALE.US)$ , and $Rio Tinto (RIO.US)$ through press releases and searching information about the Materials sector. I learned about these companies from a press release highlighting MP and it lead me to other companies in the Materials sector. I was interested in diversifying my portfolio, so reading the press release led to these companies eventually being added to my portfolio.
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One news event that I can’t seem to forget is the rumored buyout of $Pinterest (PINS.US)$ by $PayPal (PYPL.US)$ . I had owned both stocks at the time of the news and I was wondering if I should sell my portion of Pinterest at the time. The price of Pinterest had gone up again, and I had missed out on claiming gains earlier in the year when the stock price was higher, but I decided to wait it out and see how the buyout news would conclude. At the end, the buyout didn’t happen and I ended up not being able to claim significant gains… again.
I’m still sticking with PayPal in the long run though.
Another newsworthy event was when the different vaccine options received approval for use in the US. I had small positions in $Pfizer (PFE.US)$ and $Moderna (MRNA.US)$ , so when I saw the news popping up about approval, I expected the market to react. I decided to not buy in when prices climbed high and added a bit here and there when there were some dips.
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I believe the turning points of my watchlist stocks have been when something newsworthy happens and when I see a shift in the interest of some stocks based on volume and movement of the stock price. Once I know I like a company, I like to buy a little when there are dips. That’s my form of dollar-cost averaging. I don’t tend to add on positive news reports and I wait to see if there’s some sort of correction in stock price down the line.
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I think reading different opinions in the news can steer you one way or the other, but when most of the articles are aiming in one direction, you can have an idea how the media is feeling. I believe fear and excitement sells attention, so at the end they are in the business of gathering your attention, whether it’s positive or negative news. Sometimes the news might follow trends in being positive or negative because that’s what everyone else is doing, and it’s not really demonstrating where the market is headed. Based on the tone of the articles, you can “smell” bear or bull market sentiments when there might be some hesitancy in investing or when there is interest in eagerly adding more, respectively.
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