How Overconfidence Hurts Investors
A study of 10,000 discount brokerage accounts from 1987 to 1993 shows that on average, the stocks investors sold beat the market by 2.89% after two years and those they bought underperformed it by 0.68%. Here's how they lost out overall after two years. Lost value from -2.89% stocks sold Underperformance of -0.68 stocks bought Transaction costs -5.90 Total value lost -9.47% DATA: TERRANCE ODEAN
Updated Sept. 18, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.