Brad Barber and Terrance Odean
| We analyze the common stock investment performance of 166 investment clubs using account data from a large discount brokerage firm from February 1991 through January 1997. The average club tilts its common stock investment toward high-beta, small, growth stocks, and turns over 65 percent of its portfolio annually. The average club lagged the performance of a broad-based market index by over three percent per year; the average club earned an annualized geometric mean return of 14.1 percent, while a market index returned 17.9 percent. In addition, 60 percent of the clubs we analyze underperform the index. |
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