Investors who are most confident of their skill and trade the most often get the worst results because of the trading costs they incur, according to Buckingham Asset Management in St. Louis. You are more likely to outperform other investors if you just buy market-matching index funds. Adding a risky international stock to your portfolio can reduce overall risk. Foreign stocks may stay the same or climb just when U.S. stocks are tumbling. If the stock market is down and you're still adding fresh savings, you're buying at bargain prices.
Younger investors can profit most from long-run returns, but are the least likely to save.
Clements claims the best time to buy cyclical stocks like cars, paper, and steel is when they have no earnings. The best time to sell them is when they are making plenty of money. The most-discussed investments tend to have the lowest returns. They get their prices bid up, lowering subsequent returns. The more successful an actively managed stock fund is, the more difficult it is for that performance to continue, because of the influx of new cash from investors.