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Know when to hold


The average investor must rely on a brokerage house to make recommendations on individual stocks, and the labels are closely watched both by clients and other brokerage houses. The problem is that the labels are closer to coded messages than clear signals of what an investor should do. Each brokerage house, for example, has its own lingo for stock recommendations.

Buy: Buy the stock now for long- and short-term gains.

Long-term attractive: Buy for long-term gains.
Market performer: Stock likely to mirror performance of the market.
Market underperfomer: Stock likely to perform below the market.

Buy: Buy expecting to hold stock for at least two years. There is low risk attached.
Accumulate: Buy expecting a large appreciation but at large risk.
Hold: You're on your own. House doesn't know if the stock will appreciate or if it is a good short candidate.
Sell: If you short this stock, you can make money.

Buy: Buy the stock.
Accumulate: Buy, but it's not urgent to move quickly. Expect total return potential of 10 to 14 percent.
Neutral: You may take it or leave it.
Swap: Sell this stock and buy something else.