New research – Over 50s Perform Best in Financial Markets
A new five year study of financial trading shows that the over 50s are by far the most successful, profitable traders and investors: a full 40% more profitable than their 20-something counterparts, ending the myth that risk and results are the stuff of youth. The research – conducted by financial trading coach and author Vince Stanzione of www.fintrader.net – studied the trading of 1000 UK individuals between October 2004 and October 2009, covering bull and bear markets and the volatile 2008/9 markets.
Stanzione identified 1000 of his students and clients and divided them into three age groups: 18-30, 30-50 and 50+, with equal numbers in each group. He then analysed their performance and returns over the last five years to see which achieved the most return on capital.
Stanzione says: “I’ve long believed that, in the markets, results come from wisdom, not the hot-headedness of youth. But, even so, I was surprised to see just how well the ‘silver surfer’ traders fared: the over 50s performed 25% better than the 30-50 group and a staggering 40% better than the 18-30s, who were the least successful of the groups.”
Time spent trading was a factor for all three groups. The 18-30s and over 50s spent more time on their portfolios, which may be because the 30-50 group had greater work and family commitments elsewhere. But clearly the over 50s had much greater productivity.
Risk insights also came to light from the research. Stanzione continues: “Another myth that the research busted was that older people are less willing to take risks. The 50+ traders took higher risks for higher returns than the 30-50 group, with a strong appetite for commodities and commodity companies: gold, crude oil and silver featured highly in their portfolios.”
The secret to the difference between youth and age lay in discipline, says Stanzione: “The 18-30s tended to break trading rules and failed to follow systems through. Maybe they had poor attention spans as they would often close out winning trades too soon. Older traders kept better records and managed their money better.”
A further myth busted was of internet familiarity. The 18-30s made great use of internet information, charts and chat rooms but so did the over-50s (more than the 30-50s), becoming extremely web savvy and using a wide range of online tools.
Stanzione, himself a successful trader, coach and author of several works – including ‘How to Stop Existing & Start Living’ – has seen a sharp surge in ‘silver surfer’ students in recent months: “Older investors are sick of earning 1% a year and being sucked dry by high management costs for poor advice. In increasing numbers, they’re now learning to trade markets themselves, and doing it very well.”
But one theme which is common to all groups is “total distrust of financial advisors and professionals. Clients want to be in control of their own money and investment decisions. The use of Exchange Traded Funds with lower management costs and higher flexibility has ballooned in the last two years and I predict this trend will continue.”
Investors and potential traders who wish to learn more about trading financial markets and to get a free copy of 10 top trading tips from a trading veteran should visit www.fintrader.net .
Notes for editors
About Vince Stanzione
Vince Stanzione is a self-made multi-millionaire based in Europe. Beginning aged 16 at Nat West Foreign Exchange in London, he quickly made his mark and then left to form his own company, since when he has been involved in mobile communications, premium rate telephony, interactive gaming, publishing and television and financial trading. He currently lives most of the year between Spain and Monaco and trades his own funds, mainly in currencies and commodities. He also teaches a small number of students and produced the best-selling course on Financial Spread Betting.
Vince Stanzione is the author of “How to Stop Existing & Start Living”, is the Spread Betting Expert for Growth Company Investor and writes monthly columns for The City Magazine, Canary Wharf and Vicinitee Magazine.
Summary of research results
The research analysed five years’ trading results of 1000 UK individuals split evenly into three age-based groups: 18-30, 30-50 and 50+, with the highest age being over 80. The five years ended in October 09 and therefore covered bull and bear markets, the banking collapse of 2008 and the volatile 2008/9 markets.
· Tended to trade often with many day trades
· Highly dependent on internet, charts and chat rooms.
· Tended to break trading rules the most, had a poor discipline at following systems and often closed out winning trades too soon
With large swings in account balances and trading results, this group did the least well of the three. It also traded more Penny shares (under $5 for US and under 50p for UK) and leveraged FX which suggests a striving for quick results with a smaller trading bank than the older groups.
30 – 50 group
· Performed better than 18-30s but less well than over 50s
· Least dependency on the internet, of the three groups
· Followed trading systems but less open to learning new skills or trading new products.
· Traded less than the 18-30s and slightly less than the over 50s, which could be related to lack of time.
Overall this group made money and beat the average index fund, trading a mix of products including FX, shares and commodities.
· Performed by far the best, making more profit per £1,000 invested: around 40% higher returns than 18-30s and 25% higher than 30-50s
· Had become very internet literate in recent years, using many online tools and research, possibly helped by having more free time
· Traded less than 18-30s but a little more than 30-50s
· Kept the best records and used good money management
This group was open to taking higher risks than the 30-50 group and was not content with low risk/low returns. It had a strong appetite for trading/investing in commodities and commodities based companies, gold, crude oil and silver featuring highly in trading portfolios.
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