While conventional wisdom suggests a “Don’t just sit there; Do something” approach to investing, nothing could be further from the truth.   Once again, data from USA TODAY and online portfolio tracker SigFig shows active traders dramatically underperform those with a buy-and-hold approach.

Unfortunately for their wealth, many investors learn this the hard way.   Data by USA TODAY and online portfolio tracking service SigFig show how much active traders underperform more patient ones. [1]
SigFig, which now tracks over $45 billion in assets held in individual brokerage and 401(k) accounts, groups investors based on how much they trade.  “Buy and Hold” investors trade the least;  “Aggressive” investors trade the most.

The graphic below shows how these active traders performed over a six month period this year.  The results speak for themselves:


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Investors without a sensible plan fall prey to their own impulses and the chorus of media voices urging them to “Do something!”, even though it’s wiser to do nothing.
1 USA TODAY, June 5, 2013