Sentences with phrase «suggesting high trading costs»
By these measures, momentum, illiquidity, and low - volatility strategies score badly, suggesting high trading costs and low capacity, while value and quality strategies tend to score well, as do low - turnover strategies such as indexing, equal - weight, and Fundamental Index ™.
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In summary, evidence suggests that individual investors who trade options in aggregate underperform their counterparts who do not because: (1) they are especially prone to overreact to past market returns; and, (2) they bear high trading costs.
The paper suggests plan sponsors budget for higher volatility and higher trading costs in their portfolios.
Theory and empirical evidence suggests that investors require higher return on assets with lower market liquidity to compensate them for the higher cost of trading these assets.