The Influence of Perception on the Urge to Trade

Consider this scenario: You are presented with two market environments. In the first, the S&P 500 has risen nearly 10% and is holding onto its gain heading into what should be a good earnings season. In the second, the S&P 500 has not only pulled back, but also closed below its 50-day moving average for…

 

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…