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> if you're not a professional, the less you trade, the better I once found some numbers that relate frequency of trading to earnings for individuals, & was in
by bunderbunder 13y ago
> if you're not a professional, the less you trade, the better
I once found some numbers that relate frequency of trading to earnings for individuals, & was initially shocked by just how strong the inverse correlation is.
Though on further reflection, I'm not sure it's really counter-intuitive. The more money you spend on broker commissions, the more you have to profit just to break even.
- superprime 13y agoAt large enough size, commission/trading costs are not necessarily a significant factor--individuals are just not great at stock picking and timing the market.
- bunderbunder 13y agoAbsolutely true. However, individuals don't necessarily have enough money in their brokerage accounts to hit the point where trading costs become insignificant, especially if they're trying to diversify.
- HockeyPlayer 13y agoAt those larger size, the bid/offer spread becomes much more significant, and is usually a bigger cost than the commission.