The Courage of Misguided Convictions: why traders There is...

The Courage of Misguided Convictions: why traders There is abundant evidence that active trading is futile. A way to lose money and enrich brokers. As a long term shareholder in ASX I hope people continue to trade actively so I am acting against my own vested interest by presenting the following link:


http://papers.ssrn.com/sol3/papers.cfm?abstract_id=219175

The Courage of Misguided Convictions: The Trading Behavior of Individual Investors

We present evidence that the average individual investor pays an extremely large performance penalty for trading. Those investors who trade most actively earn, on average, the lowest returns. And the stocks individual investors purchase do not outperform those they sell by enough to even cover the costs of trading.

You can find more interesting articles here:

http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1513


If you read through these studies and decide you still want to trade, I wish you luck, because the odds are very much against you. Passive long term investing in quality stocks is a better strategy. I don't see any traders challenging Buffett for the honour of the worlds 2nd richest man.