- 80% of all day traders quit within the first two years.
- Among all day traders, nearly 40% day trade for only one month. Within three years, only 13% continue to day trade. After five years, only 7% remain.
- Traders sell winners at a 50% higher rate than losers. 60% of sales are winners, while 40% of sales are losers.
- The average individual investor underperforms a market index by 1.5% per year. Active traders underperform by 6.5% annually.
- Day traders with strong past performance go on to earn strong returns in the future. Though only about 1% of all day traders are able to predictably profit net of fees.
- Traders with up to a 10 years negative track record continue to trade. This suggests that day traders even continue to trade when they receive a negative signal regarding their ability.
- Profitable day traders make up a small proportion of all traders – 1.6% in the average year. However, these day traders are very active – accounting for 12% of all day trading activity.
- Among all traders, profitable traders increase their trading more than unprofitable day traders.
- Poor individuals tend to spend a greater proportion of their income on lottery purchases and their demand for lottery increases with a decline in their income.
- Investors with a large differential between their existing economic conditions and their aspiration levels hold riskier stocks in their portfolios.
- Men trade more than women. And unmarried men trade more than married men.
- Poor, young men, who live in urban areas and belong to specific minority groups invest more in stocks with lottery-type features.
- Within each income group, gamblers underperform non-gamblers.
- Investors tend to sell winning investments while holding on to their losing investments.
- Trading in Taiwan dropped by about 25% when a lottery was introduced in April 2002.
- During periods with unusually large lottery jackpot, individual investor trading declines.
- Investors are more likely to repurchase a stock that they previously sold for a profit than one previously sold for a loss.
- An increase in search frequency [in a specific instrument] predicts higher returns in the following two weeks.
- Individual investors trade more actively when their most recent trades were successful.
- Traders don’t learn about trading. “Trading to learn” is no more rational or profitable than playing roulette to learn for the individual investor.
- The average day trader loses money by a considerable margin after adjusting for transaction costs.
- In Taiwan the losses of individual investors are about 2% of GDP.
- Investors overweight stocks in the industry in which they are employed.
- Traders with a high-IQ tend to hold more mutual funds and larger number of stocks. Therefore, benefit more from diversification effects.