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"The source of women’s superior returns is the way they trade. Or, rather, how they don’t. Female Fidelity customers bought and sold half as much as male customers. Vanguard saw similar patterns over the same decade-long period when examining workplace retirement accounts that it manages; at least 50 percent more men traded in them than women did every year during that time."
Title looks like “click-bait”. But the article is well written and a very thoughtful look at investing attitudes. Which attitudes and habits are successful. Which ones aren’t. Those issues aren’t really limited to male / female IMHO.
I believe it was another Fidelity study that revealed that accounts of deceased investors did better than live ones regardless of gender. 4 Things Dead People Can Teach Us About Investing
The way this story goes, one day, the chief bean counters at the financial giant Fidelity did this big study on what kinds of investors performed the best. And what they found out was, the accounts with the highest returns were classified as “dead or inactive.”
In other words, dead people do better in the stock market than living people, and it’s because dead people aren’t always fiddling with their investment accounts the way living people do.
The text in the originally cited piece immediately following the quoted section reads:
Now, the only problem with this cool story is there’s no evidence it ever really happened. Google results turn up plenty of stories about this supposed “study” — but no actual study.
This is in response to stillers preceding post which was subsequently deleted.
The gist of the original article suggests that overconfidence leads to excessive trading which often results in lower returns. These particular issues are not necessarily gender-specific. Taking this into consideration, male or female investors may be able to modify their behavior to increase the odds of a successful outcome.
Didn’t intend to sound morose. But, sometimes doing nothing Is the preferred option. I think that’s part of the enduring mythology about dead people outperforming active investors.
I didn't interpret your comment that way. Speaking from experience, sometimes doing nothing is the best option but it may be difficult not to tinker. I believe Jack Bogle said: "Don‘t Do Something - Just Stand There!"
I didn't interpret your comment that way. Speaking from experience, sometimes doing nothing is the best option but it may be difficuilt not to tinker. I believe Jack Bogle said: ""
Re; “Don‘t Do Something - Just Stand There!”
David has used the expression with effect in one or more of his Commentaries.
Bogle was a class act. Would like to have heard his take on today’s markets. While I tinker a lot, fortunately it’s with only 2-3% of assets - just around the edges. Enjoy it. But I’d have more money if I’d sunk 100% in PRWCX 25 years ago and followed with a “RipVanWinkle” act!
But I’d have more money if I’d sunk 100% in PRWCX 25 years ago and followed with a “RipVanWinkle” act!
I stand at the launch pad of retirement (age 62) thinking that PRWCX, VWINX and a little Cash will provide a safe withdrawal (different than a safe withdrawal rate) in the first ten years of retirement. I am positioning about 1/3 of my portfolio in these two funds (plus 1 year of cash equivalent withdrawals). My hope is to derive both growth and income from these positions.
The remaining 2/3 will hopefully not be needed for 10 years and will be invested for growth (to help fund year 72 - year 92 ). Along the way, I hope to reallocate gains from this long term bucket back into these 2 funds (and replenish cash). I will deal with down markets by withdrawing a little less since I have other reliable monthly income. I am a fan of withdrawing fixed percentages rather than fix dollar amounts and letting the market dictate the ups and downs of the actual dollar amount (withdrawal).
A 4% withdrawal (based on the entire portfolio) from a fund like VWINX which has a MAXXDD of about 10% would mean a withdrawal haircut in a very bad year that equates to 3.6% (10% off of 4%). I can live with that as a number to plan around. I feel VWINX will work well in conjunction with cash (as an alternative withdrawal source) giving VWINX a 1 year recovery time if we have a MAXDD event. PRWCX will remain a 5 - 10 year position that will be milked or kept out to pasture depending on what the market offers. PRWCX's milk will be refrigerated into VWINX and Cash as needed.
Long time (2/3 of my portfolio) I want to invest in trends....healthcare, tech, and consumerism...trying to own the very best funds and the very best fund managers.
...trying to own the very best funds and the very best fund managers.
... aren't we all? Problem in doing so is a new better fund and best manager shows up in cycles. They make interesting topics here at MFO. I'm not as fixated 'anymore' on chasing that ever-changing field. But like you, I am a believer in PRWCX which I believe is now ~ 25% of my total self managed account.
Comments
Thanks for the link.
4 Things Dead People Can Teach Us About Investing investing/dead-investors/
Link
The gist of the original article suggests that overconfidence leads to excessive trading which often results in lower returns. These particular issues are not necessarily gender-specific.
Taking this into consideration, male or female investors may be able to modify their behavior to increase the odds of a successful outcome.
https://www.morningstar.com/articles/1064755/the-losers-curse
I am thinking somewhat more of this has to do w the bull market than acknowledged ...
I'm sorry to hear that.
I've experienced a similar outcome on several occasions.
Better luck next time!
Speaking from experience, sometimes doing nothing is the best option but it may be difficult not to tinker.
I believe Jack Bogle said: "Don‘t Do Something - Just Stand There!"
David has used the expression with effect in one or more of his Commentaries.
Bogle was a class act. Would like to have heard his take on today’s markets. While I tinker a lot, fortunately it’s with only 2-3% of assets - just around the edges. Enjoy it. But I’d have more money if I’d sunk 100% in PRWCX 25 years ago and followed with a “RipVanWinkle” act!
The remaining 2/3 will hopefully not be needed for 10 years and will be invested for growth (to help fund year 72 - year 92 ). Along the way, I hope to reallocate gains from this long term bucket back into these 2 funds (and replenish cash). I will deal with down markets by withdrawing a little less since I have other reliable monthly income. I am a fan of withdrawing fixed percentages rather than fix dollar amounts and letting the market dictate the ups and downs of the actual dollar amount (withdrawal).
A 4% withdrawal (based on the entire portfolio) from a fund like VWINX which has a MAXXDD of about 10% would mean a withdrawal haircut in a very bad year that equates to 3.6% (10% off of 4%). I can live with that as a number to plan around. I feel VWINX will work well in conjunction with cash (as an alternative withdrawal source) giving VWINX a 1 year recovery time if we have a MAXDD event. PRWCX will remain a 5 - 10 year position that will be milked or kept out to pasture depending on what the market offers. PRWCX's milk will be refrigerated into VWINX and Cash as needed.
Long time (2/3 of my portfolio) I want to invest in trends....healthcare, tech, and consumerism...trying to own the very best funds and the very best fund managers.
And I like this one