Should you invest after a stock splits?

June 6, 2008

A stock I've considered investing in recently split 3 for 1. Does that mean this a good time to buy shares?

A stock I've considered investing in recently split 3 for 1. Does that mean this a good time to buy shares?

Not necessarily. It means the stock has had a period of strong performance, but as you know, top performance in the past doesn't guarantee outstanding future returns. So before investing, do some research to learn the underlying reasons for the company's success and make sure those factors are still driving its current and future plans. A stock split can also indicate that management is optimistic about the future, but that's already reflected in the price of the stock when the split is announced.