Buying High and Selling Low

Apr 2014 //
Optimism/Pessimism
Behavioral Finance

…a number of studies have shown that the average investor in a given mutual fund tends to achieve a lower return than the fund in which he or she has invested.  How can this be?  It’s simple, actually.  Investors … add to their accounts when they feel optimistic and reduce their investment when they feel pessimistic (otherwise known as buying high and selling low) will typically earn lower returns than those who stay invested through thick and thin.