Cramer and His Colleagues Are Killing Your Returns
Good points from Dan Solin –
If you want to make a New Year’s resolution that will put money in your pocket, here’s my suggestion: Don’t rely on the advice of Jim Cramer or his colleagues in the securities industry who tell you they have the ability to pick stock winners.
In his excellent book, Think, Act ,and Invest Like Warren Buffett, Larry Swedroe summarizes data indicating that individual investors achieve poor returns. This data shows individual investors who rely on brokers and others who claim to be able to “beat the markets” underperform market returns that are theirs for the taking. The only winners are the brokers who “advise” them and the advertisers on shows like Cramer’s, who do their best to convince you they have an expertise that doesn’t exist.
Since Cramer appeals mainly to high-testosterone men, it seems logical to inquire about the investing prowess of this demographic. One study showed that men trade more and have lower returns than women. The underperformance was more pronounced when comparing single men and single women.