May 6, 07:22 PM

NYU Study Finds Median Retail Investor Spends Six Minutes Per Trade, 73% on Price Charts, 14% Fundamentals, 1% Risk

A recent study conducted by researchers at New York University analyzed the research behavior of individual retail investors, revealing that the median investor spends approximately six minutes researching before executing a trade, primarily focusing on same-day price charts. Specifically, 73% of the time spent on research is devoted to reviewing recent price performance, with only 14% allocated to assessing company fundamentals and a mere 1% dedicated to evaluating risk. The average time spent on research per traded ticker is about 30 minutes, while the mean total research time per trade is 144.2 minutes, highlighting a disparity between median and mean figures. This limited research approach contributes to suboptimal investment outcomes, as investors tend to buy during periods of peak optimism and sell at peak pessimism, a behavior noted by investment pioneer Sir John Templeton. The findings underscore the challenges retail investors face in conducting thorough due diligence and the tendency to rely heavily on short-term price movements when making trading decisions.

#New York University #John Templeton

Written with ChatGPT (GPT-4).

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NYU Study Finds Median Retail Investor Spends Six Minutes Per Trade, 73% on Price Charts, 14% Fundamentals, 1% Risk

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