Fidelity Investments Did A Study On Which Client Accounts Did Best And What They Found Was Hilarious


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If you want good investment performance, forget you have an account.


On this week's Masters in Business program on Bloomberg Radio, Barry Ritholtz talks with James O'Shaughnessy of O'Shaughnessy Asset Management.

Ritholtz and O'Shaughnessy spend much of their discussion talking about the ways people screw themselves when investing, because nothing gets in the way of returns quite like someone who thinks they have a great idea.

O'Shaughnessy discusses a number of interesting analyses he's done with regard to the length of holding periods (spoiler: the shorter you hold a stock the more likely you are to lose money) among other things.

But O'Shaughnessy relays one anecdote from an employee who recently joined his firm relayed one anecdote that really makes your head spin.


O'Shaughnessy: "Fidelity had done a study as to which accounts had done the best at Fidelity. And what they found was..."

Ritholtz: "They were dead."

O'Shaughnessy: "...No, that's close though! They were the accounts people who forgot they had an account at Fidelity."

Ritholtz also follows with some of his experiences in estate planning, where a family fighting over some inherited assets might not touch them for say 10 or 20 years while they work out the problem, and later find that those 10 or 20 years are the best period of performance.

The absolutely terrible investment decisions that people make is something that just can't be emphasized enough.


We recently highlighted this chart from Rich Bernstein that shows just how terrible you are at investing: don't forget it.


Richard Bernstein Advisors