Sell the rumour buy the news

A classic phrase!

"Sell the rumor, buy the news" is a popular investment adage that advises investors to take action based on market expectations rather than actual news. Here's what it means:

Sell the rumor: When a rumor or speculation about a company's performance, earnings, or other significant event spreads, investors often buy the stock in anticipation of good news. This can drive up the stock price. The phrase "sell the rumor" suggests that investors should sell their shares before the news is confirmed, as the price may drop once the rumor is proven false or the news is revealed.

Buy the news: Once the news is officially announced, investors who were waiting for confirmation of the rumor may buy the stock, driving up the price. The phrase "buy the news" advises investors to buy the stock when the news is confirmed, as the price may rise due to increased demand.

In essence, "sell the rumor, buy the news" encourages investors to be cautious of market speculation and to wait for concrete evidence before making investment decisions. It's a reminder to separate fact from fiction and to avoid getting caught up in market hype.

This phrase is particularly relevant in the context of earnings announcements, mergers and acquisitions, and other significant events that can impact a company's stock price. By following this advice, investors can potentially avoid losses and capitalize on opportunities when the news is confirmed.