When to Buy or Sell? Don’t Trust Your Instincts

ANYONE watching television commercials could easily conclude that trading stocks is something a baby can do from a crib. But new research into 17 years of call records at a boutique investment adviser shows that the baby in all of us is likely to buy or sell at the worst possible time.

Philip Z. Maymin, an assistant professor of finance and risk engineering at Polytechnic Institute of New York University, studied comprehensive records kept by the investment firm Gerstein Fisher from the firm’s founding in 1993 to mid-2010. The firm has over $1 billion in assets.

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“It turns out we could do an awful lot by counting the sheer number of touches,” Mr. Maymin said. Nonessential communications, like mass e-mails and New Year’s greetings, were removed from the study, he said.

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