Wise Wealth Advisors

D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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The Secret to Investing Success: A Good Case of Amnesia

Posted by Muthu on September 11, 2014

“I am fascinated by an anecdote related recently by James O’Shaughnessy of O’Shaughnessy Asset Management. An employee who recently joined his firm told him that Fidelity had studied which customer investing accounts performed the best: They were the ones held by people who had forgotten they even had Fidelity accounts, and so did no buying or selling from them.

When O’Shaughnessy told that tale on Bloomberg Radio to Barry Ritholtz of Ritholtz Wealth Management, Ritholtz responded that he’d noticed something similar with families fighting over inherited assets. Because of extended court battles, in some cases, the accounts couldn’t be touched for 10 or 20 years: No buying new investments or selling old ones. Those families subsequently found that the period of inactivity was the time when their investments performed best.”

(To read more: : http://www.dailyfinance.com/2014/09/10/investing-success-secret-amnesia/?a_dgi=aolshare_twitter)

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