News Flash- Investors Lose 2% A Year to Timing
September 29, 2003
New York State Attorney General Eliot Spitzer's complaint against Canary Capital Partners says that market timing and late trading can cost investors as much as $4 billion a year, but another report puts it in terms that may hit home a little harder for many investors. Timing can sap a fund's returns by as much as 2% a year, according to published reports.
Besides diluting returns, short-term trading jacks up transaction prices and may cause some portfolio managers to have a bigger horde of cash on hand than they otherwise might. Obviously, in a good market, the more money on the sidelines not going to work in the equities markets, the lower the return.
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