Strategies for the Irrational Investor

If you are like the typical investor, cognitive biases, emotions and reactive thinking inevitably influence your decisions to some extent. The result can often be subpar portfolio returns. Some of the most obvious examples of behavioral errors are lotteries. Why do we play when the odds of winning are low? Ironically, part of the reason…

 

Trading More Frequently Leads to Worse Returns

This interview originally appeared in the November 2014 issue of the AAII Journal. What impact does active trading have on portfolio performance? Terrance “Terry” Odean, professor of Finance at the University of California, Berkeley, has done quite a bit of research into the performance of individual investors. He spoke with AAII on his studies and their…