That’s a fact of the world we live in, and it holds true when dealing with money—especially investments. And right now I want to focus on one particular aspect of investing that could net you thousands in a day.
Here’s the date that you need to know…
The price of a stock is basically determined by how much of that stock is being purchased versus how much of it is being sold. So you could also say that a stock’s price is based on the overall sentiment investor toward that stock.
And with that in mind, think about some of the things that could significantly affect the sentiment toward any given stock…
New products for tech companies? Trial results for pharmaceutical companies? New safety regulations being passed for oil and gas companies?
All of those would certainly have an impact on sentiment and share prices, but there’s one specific thing that happens on a specific date that has the potential to earn you thousands overnight.
But beware, it could also cost you big if you don’t see it coming and it doesn’t go in your favor.
For any stock that you own and any stock you’re looking to trade, here’s the date you need to know: The date earnings are reported.
The quarterly earnings report can send a stock’s share price sky high with good results, but a bad report can do the exact opposite.
It’s all a consequence of the expectations and any company’s ability to beat those earnings expectations are fail to meet them.
Here are a couple of examples:
Century Aluminum (CENX) beat analysts’ estimates for earnings in the first quarter of this year. The next day, shares of CENX jumped from $12.89 to $14.60, a climb of over 13%!
On the flip side, DTS, Inc. (DTSI) failed to meet analysts’ expectations for first quarter earnings and experienced a drop in share price from $36.80 to $33.45 from one day to the next, that’s a fall of nearly 10%.
With those kinds of swings, putting your money in the right trade at the right time could easily give you thousands of dollars in a day. But you’ll have to be careful to avoid buying stock in a company that then fails to meet earnings estimates.
Sometimes the wisest move is to wait and see how a stock will react to earnings if you don’t have a great indication to how the results will turn out.