How Investors Hurt Returns

By on February 15, 2010

Dan Richards at examines the behavioral finance topic of overconfidence from a different angle. Using demographic data from 30,000 investors and by analyzing their investment results, Richards concluded that men are more overconfident than women, in that they trade 67% more frequently and hurt their investment returns by an additional 1% annually versus buy and hold.

Richards also looks at the effects of under-diversification and the behavioral finance trap of investors selling their winners and holding on to their losers.

Source: Advisor Perspectives

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