Think Twice, Even Thrice, Before Trading
by Mark Hulbert
If the average thing you do as an investor is a mistake, then you ought to do it as little as possible.
Though the logic of this argument is unassailable, investors repeatedly resist it—either by denying it outright or, more commonly, by believing that it applies to everyone but themselves.
For this article I review the evidence I have compiled about portfolio transactions from my more than three decades of tracking the performance of investment advisory newsletters in the Hulbert Financial Digest. Though the weight of my evidence doesn’t mean that you should never trade, it does show just how large a burden of proof each of us must satisfy before it becomes rational to do so.
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