Getting your player ready...
The higher your IQ, the more likely you are to own stocks, and to be good at picking them.
So say two studies by researchers at UCLA, the Helsinki School of Economics and the University of Chicago. The advantage shows up most clearly in near-term results. Returns on high-IQ investors’ trades after two days are 11 percent better than low-IQ investors’, on an annualized basis. Beyond a month, the returns tend to even out.
Among the most common mistakes: not participating enough in the stock market, not diversifying portfolios enough and buying index funds with high expense ratios.
