Why Boring Traders Make More Money
In 2024, the S&P 500 returned 25%. The average equity investor made 16.5%.
Same market. Same year. An eight-point gap between the index and the people trying to beat it. That gap wasn’t bad luck. DALBAR tracks this every year, and the cause is almost always the same: people did things. They sold in the dip, waited for confirmation, bought back after the rally had already happened. The market paid a premium to everyone who sat still, and charged a fee to everyone who fidgeted.
I think about that number a lot, because it’s the cleanest evidence I know of that action is overrated.
Here’s the uncomfortable part. The behavior that makes money is boring. It’s holding a position that isn’t doing anything interesting. It’s not touching the account on a red day. It’s letting a system take a small loss without you leaning in to “fix” it. None of...
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