Most day traders, especially heavy day traders, lose money trading. Why do investors engage in such a wealth reducing activity?

Question:  There are more than 100 million people in the world engaging in trading everyday.If trading do not work, why would there be so many people engaging in this activities everyday over long period of time? WHY? I am puzzled too.Most day traders, especially heavy day traders, lose money trading. Why do investors engage in such a wealth reducing activity?1. One possibility is that investors simply find day trading entertaining.- Undoubtedly some investors do find day trading entertaining, but can entertainment account for the...

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The Growth Stocks of Peter Lynch

Peter Lynch From 1977 through his retirement in 1990, Peter Lynch steered the Fidelity Magellan Fund to a total return of 2,510%, or five times the approximate 500% return of the Standard & Poor's 500 index. In his 1989 book One Up on Wall Street, Lynch described a variety of strategies that individual investors can use to duplicate his success. These strategies divide attractive stocks into different categories, each characterized by different criteria. Among those most easy to identify using quantitative research are fast growers, slow...

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Banks lead the equity sector flows

Banks and financials stocks have had a pretty good year. The Thomson Reuters Global Financials index is up by more than 20% in the last 12 months, and although the detritus of the financial crisis still offers the occasional sting, investors are starting to see brighter spots for the industry. That confidence is increasingly obvious in the fund flows. Our corporate cousins at Lipper track more than 7,000 mutual funds and ETFs which are...

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US investors prop up emerging equity flows

U.S. mutual fund investors are ploughing on with bets on emerging market equities, according to the latest net flows numbers from our corporate cousins at fund research firm Lipper. Has no one told them there’s supposed to be a massive sell-off? August was the 30th straight month the sector has seen net inflows, and the 9th straight month of net inflows above $1 billion. Sure, there’s a downward trend from the February peak, but the resilience...

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100-Year Flood /= 100-Day Flood

Investors experienced a 100-year flood in 2008-2009 and now it seems a broad array of media outlets endlessly bombards us with new, impending 100-day floods that are expected to drown investment portfolios and wash the economy into recession. The -3% drop in the S&P 500 index during August is symptomatic of investor nervousness. This is nothing new. The media has been reporting scary forecasts every day over the last four years. Yesterday,...

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