This article suggests that once we begin to rebound from the current market correction, lightly traded stocks like TFSL stand to benefit the most. (Note – the article is from Mar. 17)
As the major U.S. stock-market indices continue languish in bear-market territory, investors are looking for signs of a market bottom and preparing a wish list of potential bargains in anticipation of a recovery.
One factor investors should consider are low liquidity stocks, according to a Monday research note by Goldman Sachs analysts, led by Ryan Hammond.
On Tuesday, the Dow Jones Industrial Average DJIA, -0.33%, the S&P 500 index SPX, -1.21% and the Nasdaq Composite index COMP, -2.14% were trading roughly 30% below their record highs notched in February, in what Goldman describes as “the quickest bear market on record.”
The price declines have led to higher bid-ask spreads and greater difficulty for investors in finding buyers or sellers of stocks at desired prices. “Liquidity has evaporated within U.S. equity markets, magnifying index-level moves during the ongoing bear market,” Hammond wrote. “The magnitude of the current liquidity shock, as measured by our ‘illiquidity ratio’, is now approaching the 2008 experience.”
Cont’d:
https://www.marketwatch.com/story/as-stock-market-liquidity-…
Andy
CMFGouldberg
no position