Last week, I wrote about the documented evidence that trading activity results in lower returns to investors. This is equally true for those people we think of as professional investors and for people day trading in their parents’ basements.
As far as I’m aware, there’s no peer-reviewed, academic study that shows any evidence that active trading will result in better returns. Despite that evidence, there are still plenty of people who claim to outperform a low-cost, buy-and-hold investment strategy. They insist that settling for the return of the market, say in the form of a simple index fund, is settling for mediocrity.
Read the rest of the article at The New York Times.