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Tuesday, November 03, 2009

The 50-plus are the best stock traders

A big caveat, so beware. I have not idea how good or bad this research is (conducted by Fintrader.net) but I think the results are fascinating, even if they are wrong.

Here are some quotes:

A new five year study of financial trading shows that the over 50s are by far the most successful, profitable traders and investors: a full 40% more profitable than their 20-something counterparts and 25% better than the 30-50 group.

Time spent trading was a factor for all three groups. The 18-30s and over 50s spent more time on their portfolios, which may be because the 30-50 group had greater work and family commitments elsewhere. But clearly the over 50s had much greater productivity.

The 50+ traders took higher risks for higher returns than the 30-50 group. So maybe the 50-plus are not more risk averse argument

The secret to the difference between youth and age lay in discipline. The 18-30s tended to break trading rules and failed to follow systems through. Maybe they had poor attention spans as they would often close out winning trades too soon. Older traders kept better records and managed their money better.

The 18-30s made great use of internet information, charts and chat rooms but so did the over-50s (more than the 30-50s), becoming extremely web savvy and using a wide range of online tools. So maybe the 50-plus are capable of using the Internet.

Older investors are sick of earning 1% a year and being sucked dry by high management costs for poor advice and are now learning to trade markets themselves.

One theme which is common to all groups is “total distrust of financial advisors and professionals. Really bad news for the Financial Services industry

My instincts tell me these results are probably correct but then I might be falling into the trap of using age stereotypes. Dick Stroud

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