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Thinking Can Hurt Your Investments

  • Published: December 26th, 2016
  • by Larry Swedroe

One of the most common arguments I hear against passive investing (which we can define as the use of a systematic approach to gain exposure to a factor or factors) goes like this: How can good management that is “thinking” not be superior to “nonthinking” management? I have found most investors harbor a strong opinion on this question.

Fortunately, we have evidence to help settle this matter. We’ll begin with a study by Lewis Goldberg, a psychology professor, who in 1968 analyzed the Minnesota Multiphasic Personality Inventory (MMPI) test responses of more than 1,000 patients and their final diagnoses as neurotic or psychotic.

Read the rest of the article on ETF.com.

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