Dead People Make the Best Investors

Investors have been consistently counseled to remain disciplined. Don’t panic, don’t get greedy and don’t be emotional. Often investors will get nervous and sell when the stock market has been going down. Or perhaps they notice that some sectors of their portfolio are doing much better than other sectors. They often will instinctively sell the parts of their portfolio that have been underperforming and add to their over performers after they have gone up in price.

There is a rumor floating around that Fidelity did a study (20032013) to see which types of account holders had the best performing accounts and they determined that account holders who had either died or forgotten that they had an account had the best performing accounts.

Those who never even looked at their accounts and made no trades outperformed most everybody else.

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Website: www.singerwealth.com Email: Keith@singerwealth.com

While Fidelity has never confirmed the existence of such a study, the premise makes sense. However, in 2017 Fidelity did publish a study which showed that women investors, those who are alive (and probably those who are dead too) are better investors then men who are alive. The Fidelity study revealed that that men were 35% more likely to trade then women and men made 55% more trades on average than women.

The data supports the notion that when people react to news, fear, or perceived opportunities, they tend to do worse than if they just did nothing. If you are not a professional trader, it would most probably serve you well to make less trades and simply have more patience.

This past year was a prime example. By the middle of March, the S&P 500 was down 25% and

20-year treasuries were up 19%. It was a scary time. If you tried to take defensive actions and moved

20% of your stocks into bonds that surely turned out to be an extremely costly trade because since that time the S&P 500 has rallied over 50% while the 20-year treasury fell by 4%.