What is Company Earnings Season?

Are you an enthusiastic trader who wants to find simple ways to buy and sell shares of your favorite companies? Some who have a stake in the securities markets suffer from burnout or malaise after a few years of chasing profits via highly complex technical systems. Often, they want relief from number fatigue and seek out some of the more traditional, fundamental trading systems based on knowledge, easily recognized trends, and less math-heavy techniques. The most popular one involves examining earnings season data.
The good news is that even if you are learning how to trade shares for the first time, you can take advantage of these simpler methods. Not only are they based on common sense, but they carry the benefit of have very short learning curves. For instance, a company’s quarterly earnings reports include reams of actionable information. Here are some ways that occasional and more active trading enthusiasts buy and sell securities by looking for real-world signals to get in and out of a particular stock.
Look at Earnings Season Data
For plenty of investing veterans, earnings season is the most important time of each quarter. Why? Because it not only happens four times per year, but each earnings report contains detailed fundamental information about whether a corporation is living up to its expectations, drowning in debt, undergoing management crises, and more. What is earnings season? There’s no set date for each of the four seasons each year, but it officially begins when the first major company releases its quarterly report. Then, it takes about six weeks for the rest of the major entities to do the same.
So, each season lasts about a month-and-a-half. The four runs from mid-January to the end of February, from mid-April to the end of May, from mid-July until the end of August, and from mid-October until the end of November. Note that there are four months of off-season time, namely March, June, September, and December. Why is all this so important? Because you can wait until the reports come out, find out what the institutional investors and major players think, and then decide for yourself whether your target companies’ shares are in good or bad health. This kind of data is gold for anyone who wants to keep track of a corporation’s health. In many cases however, you might have to be wary of earnings manipulators, which happens when a particular company’s earnings are written down as higher than the actual value. This type of earnings management can be hard to spot, which is why you may want to study these concepts thoroughly before you invest, or better yet, hire a financial advisor who can provide an experienced opinion.
Use the DRIP Method for Long-Term Growth
If you don’t want to deal with all that report tracking and seasonal movement, it’s possible to use a dividend reinvestment program (DRIP) of high-earning stocks for long-term growth goals. Many infrequent investors prefer this sort of set-it-and-forget-it activity. How does it work? You select aristocrats, or companies that have a long history of paying quarterly dividends and who are either blue-chip ranked or close to being market leaders. You can sign up for a DRIP through your broker. All dividends will be automatically reinvested into your account on an incremental basis, meaning you are able to own fractional shares. DRIPs have been around for decades but are getting more attention these days from people who have long-term time horizons for portfolio growth. Nothing is ever guaranteed, but DRIPs are a simple way to invest.