FA Center: Corporate insiders are taking the stock market’s big selloff in stride

Corporate insiders are giving the stock market the benefit of the doubt, despite the market’s early-October plunge.

For the record, I should stress that the insider trading to which I refer is the legal kind: transactions by a firm’s officers, directors, and largest shareholders, and reported promptly to the Securities and Exchange Commission. It’s possible by slicing and dicing the SEC data to come up with portfolios that, generally, have beaten the market by a significant margin.

Yet the past several years have been difficult for these insider-based strategies. Consider three mutual funds that have based their stock selection on the behavior of insiders.

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