They would have also made out paying a 2 percent fee. So it cost you more to jump in and out of stock funds due to fear and greed. The study look at industry statistics on investor trading activity. It concluded that many investors chase after hot performing funds instead of investing regularly in their existing stock funds. Investors are not totally at fault for jumping ship.
Mutual funds hype their performance in advertisements and investment articles.
So it's a two-way street. They entice people to buy on performance. When the funds don't deliver the goods, people sell. Alan Lavine and Gail Liberman are husband-wife personal finance columnists, journalists and authors. Their columns appear in newspapers throughout New England and the Southeast, as well as online.