Circumstances behind forced selling | Value Investing News

Circumstances behind forced selling

  • The second circumstance where an investor will be able to capitalize on a low price is if there is forced selling, but these opportunities are transient.
  • b) Fund policy required liquidations.
  • Another example are dividend funds that have a mandate that requires their funds to be invested in dividend-bearing securities – if a company decides to change its capital allocation strategy and cut dividends to zero, I usually wait a little bit before investing because there is usually a period of time where funds try to dump supply of such companies into the market.
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