Misconceptions: Market Timing verse Stock Picking: Re: Trading Mistakes

» Kirk - Re: Trading Mistakes

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In response to Trading Mistakes posted by Normxxx:

But hardly anyone knows the equally grisly statistics about equity trading: 80% of all stock investors end up losing money.

Do you or he have any data to back up that statement? It is well known that 80% under perform the index fund benchmarks but that still leaves a great deal of room between making and losing money.

Here is the article "Winning on the zigs, losing on the zags" which explains how the average investor made 2.6%, roughly 1/5th the return of the S&P500 between 1984 and 2002.

Now 2.6% sucks compared to money markets AND index fund investing, but it is hardly losing money. I hope you don’t try to tell me it is a barbell distribution where 80% lose money and 20% make huge returns for an average of 2.6%.

-- posted by Kirk