Trading Too Much

• A study analysing data between 1904 and 1974 revealed that the average return for stocks during January was five times higher than any other month, particularly in small-capitalisation stocks.
• Another study from 1972 to 2002 found that the Russell 2000 inde...

The three most widely followed indexes in the U.S. are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite.

• The Standard and Poor's 500 Index is an index of 500 large cap common stocks that represent all different sectors of the market.
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Most analysts agree that historically the stock market has returned an average of 7% — 10% per year over the last 100+ years.

Now, the first thing to understand is that 7% — 10% is an average return over long stretches of time. It’s not what you should actually expect to re...