The Coattail Effect: Your Step-by-Step Strategy For Success

Smaller investors here ride the coattails of their idols in hopes of multiplying their investments. In franchising, the coattail effect refers to a situation where franchisees who are prosperous and doing well may be forced to shut down due to the failures of franchisees who own a franchise of the same brand. This article will outline the ins and outs of coattail investing, providing you with a strong foundation for this popular strategy. Lets start with the basics. Coattail or copycat investing is a strategy that involves mirroring another investors market moves.

Its possible to follow anyone for investment advice, using their trades as a game plan. A franchisee will encounter coattail effects from the first day they enlist the franchise business, especially since the practices of both the franchisor and other franchisees will influence how the business is perceived in general.