Most investors have learned this lesson: perfectly timing markets in any form, be it stocks or exchange traded funds (ETFs), is next to impossible. So why are people still following the herd? There has to be a better way.

According to TrimTabs Investment Research, regular investors have lost around $39 billions more than was necessary in the stock markets as a result of buying during booms and selling during market panics, writes Brett Arends for Yahoo! Finance. Vincent Deluard of TrimTab remarked that “it cost [investors]about 20% to buy high and sell low.” Yikes. [The Ideal Length of Time to Hold ETFs.]

TrimTabs’ data reveals that over the past decade, investors who bought when everyone else was selling and sold when everyone else was buying were the ones who came out on top. It sounds simple enough, but it isn’t easy. Human instincts are hard-wired to follow the herd, since there is safety in numbers. But this evolutionary quirk doesn’t serve us so well in the markets. [An Optimistic View of the Markets and ETFs.]



Max Chen contributed to this article.
