Tuesday, December 21, 2010

Be a Better-Than-Average Investor - CBS MoneyWatch.com

Be a Better-Than-Average Investor - CBS MoneyWatch.com:
"...in his book, What Investors Really Want, Meir Statman shows how the desire to be above average leads investors to trade too much, and how costly a mistake that can be. The trading records of thousands of investors at a American brokerage firm showed that the returns of the heaviest traders trailed those of index investors by more than 7 percent a year, while the lightest traders trailed by only 0.25 percent per year. That means that the heavy traders were taking the risks of stocks while earning Treasury bill-like returns."

Really a good book that is full of great research presented in a format that reads well.  Definitely recommend.  Will be using it for a supplemental (required) reading next time in Behavioral Finance.

Now that finals and grading is over I will work on posting an interview I did with Dr. Statman.

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