Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

News Flash- Investors Lose 2% A Year to Timing


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.

Copyright 2003 Thomson Media Inc. All Rights Reserved.

http://www.thomsonmedia.com http://www.mmexecutive.com