Are You Trading Away Your Returns? | The Informed Investor 33 скачать в хорошем качестве

Are You Trading Away Your Returns? | The Informed Investor 33

Episode 33: What if the biggest threat to your investment returns isn’t picking the wrong stocks—but how you trade them? Many investors are drawn in by “free trading” and low expense ratios. But while your ETF or stock might be cheap—your trade might not be. Every time you go to market, you face explicit costs (like commissions and exchange fees) and implicit costs (like bid-ask spreads, market impact, and timing risk). Those costs don’t disappear—they come directly out of the return you take home. A major theme is clarity around your top priorities: Price, Quantity, and Time (PQT). In trading, you can prioritize two—but rarely all three. If you demand immediate execution and a specific security, you’ll likely sacrifice price. If you want the best price, you may need flexibility on timing or position size. Understanding what matters most in each trade—and in your overall strategy—can dramatically improve outcomes. Then there is the relationship between turnover and performance. Data consistently shows that higher portfolio turnover often leads to lower outperformance. More buying and selling means more friction. Even index funds can’t avoid turnover entirely, but minimizing unnecessary trading reduces the hurdle your returns must overcome. In Episode 33 of The Informed Investor, Dimensional’s Mark Gochnour, Head of Global Client Services, Jake DeKinder, Head of Client Communications, and Rob Harvey, Co-Head of Product Specialists, go beyond the mantra of “buy low, sell high” to show how trading costs can shape your long-term returns. They address common concerns about high-frequency trading, flash crashes, and market volatility. While markets have evolved to be more liquid and efficient—they note the importance of flexibility and discipline. Sometimes the best trade is the one you don’t make. TIME STAMPS 00:00 Intro 01:20 Headlines 2:04 Trading costs 3:38 Bid-ask spread 5:10 Implicit trading costs 5:35 Explicit trading costs 7:55 Turnover and returns 11:12 PQT: price, quantity, time 12:23 Index fund managers 13:46 Active fund managers 15:20 Flexibility in trading 17:20 Fixed income trading 17:48 High-frequency trading 20:33 Evolution of markets 21:45 Fat-finger trades 22:54 2010 flash crash 23:51 Circuit breakers 25:21 Time of day to trade 26:50 After-hours trading 28:30 Key takeaways LINKS FROM TODAY’S EPISODE: The Informed Investor: Feedback Survey https://www.dimensional.com/us-en/inf... “The Informed Investor” on YouTube    • The Informed Investor   Dimensional Fund Advisors Shorts on YouTube    / @dimensionalfundadvisors   Mark Gochnour on LinkedIn   / mark-gochnour-9a23598a   Jake DeKinder on LinkedIn   / jake-d-4105b98   Rob Harvey on LinkedIn   / robkharvey   Learn more at https://www.dimensional.com/ #bidaskspread #crossingthespread #implicittradingcosts #explicittradingcosts #turnover #tradingexpenseratio #trackingerror #executionprice #highfrequencytrading #flashcrash #circuitbreaker #globaltrading #pricequantitytime #dimensionalfundadvisors #dimensional #dfa