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To see why an SEC report is so important to incorporate into your trading research efforts, you need to see just why such reports exist in the first place. An SEC report is a document that a publicly-traded company must send out to the United States Securities and Exchange Commission. These reports have been required since 1933 when the Securities Act was passed after the great stock market crash a few years earlier. The American government passed this to ensure all financial reports from publicly-traded companies were transparent and specific. This allows investors to make sensible decisions about what they want to invest in. This would discourage them from making stock purchases that they do not fully understand, a problem that caused the stock market crash of 1929 to occur in the first place.
By having a business share all its information with the public ensures that fraudulent activities will not be as likely to occur. Every business that you might want to invest in should have a proper SEC report available. The company’s report should be detailed and provide many documents to prove the worth and operations of the company. Any business that fails to provide enough SEC information might be suspect.
