Buying and selling stocks without having to pay any trading commissions is a relatively recent innovation. One one hand, it's increased financial inclusion: more people have access to invest their hard-earned money because the barrier to investing is lower than ever. On the other hand, it's also increased access to bad investing behaviour for the same reason.
Investors on Robinhood (free trading app) traded stocks 40 TIMES as much per dollar invested compared to investors at Charles Schwab. And they traded options contracts (which can be incredibly risky) 88 TIMES MORE.
NYTimes.com & alphacution research
I put together a deep dive on YouTube that looks at the following:
By reducing the barriers to trading, people trade more. But academic studies have shown this leads to underperformance. Watch the video (21 minutes) to learn more. Have a fantastic weekend! Preet p.s. I'm going to be switching to a new newsletter delivery service soon so . I'm almost finished my doctoral thesis and once that's done I'll be creating more content again. But because it's been a long time since I've put out content consistently, I will not be offended at all if you unsubscribe from this newsletter. I get it.
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