Image Credit: Alex Nabaum
To err is human; to get paid for it is divine.
That could be the motto of professional portfolio managers who rack up high fees for results that a blindfolded chimpanzee would be ashamed of—if chimps could blush. Several new studies show that the so-called smart money is prone to many of the same errors as amateurs. Everyone can learn from such mistakes.
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This article was originally published on The Wall Street Journal.
Further reading
Benjamin Graham, The Intelligent Investor
Jason Zweig, The Devil’s Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
Kelly Shue and Richard Townsend, “Can the Market Multiply and Divide? Non-Proportional Thinking in Financial Markets”
(excellent short video presentation if you scroll down here)
Vadim S. Balashov and Andrei L. Nikiforov, “How Much Do Investors Trade Because of Name/Ticker Confusion?“
Essentia Analytics, “The Alpha Lifecycle“
Terrance Odean, “Do Investors Trade Too Much?“