Outsmarting the Market
THE SOURCE: “What Are Stock Investors’ Actual Historical Returns? Evidence From Dollar-Weighted Returns” by Ilia D. Dichev, in The American Economic Review, March 2007.
“Buy and hold” is the mantra of many investment gurus. Rather than try to time the market or pick winners and losers, they say, individual investors should put their money into a representative basket of stocks and forget about it. Good advice, says Ilia D. Dichev, an economist at the University of Michigan’s Stephen M. Ross School of Business. What a pity it’s too simple for most people to follow.
The NASDAQ market,...