In our studies, the average shortfall over a one-year horizon is more than two percent. If you add in the costs of trading bid-ask spreads, commissions, and taxes the shortfall more than doubles. . The more actively investors trade, the less they earn. We divided 66,465 households into five groups on the basis of the level of turnover in their common stock portfolios. The 20 percent of investors who traded most actively earned an average net annual return 5.5 percent lower than that of the least active investors.
Men tend to be more overconfident than women.
The difference emerges most strongly in areas such as finance that are perceived by our society to lie in the male domain. If overconfidence leads to excessive trading one might then expect men to trade more than women. We find that men trade 45 percent more actively than women. Single men trade 67 percent more actively than single women. While both men and women reduce their returns by trading, men reduce theirs by an additional 1 percent, and single men by an additional 1.4 percent.