Step 3: Stock Pickers
Wealth: The Common Investment Performance of Individual Investors,”50 Odean joined Brad Barber of University of California, Davis to analyze 66,465 individual trading accounts. They found that from 1991 to 1996, investors who traded most earned annualized returns of 11.4%, while in the same period the market earned annualized returns of 17.9%. Excessive trading resulted in inferior returns compared to the market.
Luck vs. Skill The media loves a good story. You can’t blame them. It’s their job to present the latest news. So when a stock picker finds random success, the media adorns them with guru status. When their fleeting success fades, the guru title is handed to the next lucky stock picker. Unfortunately, luck is not a repeatable
Published on Jun 1, 2015
This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...