How patience can increase your returns


Do you look at your total trading cost at the end of each year?

I make a point of looking at my total expenses each year at the same time as I review my past years activities and calculate my returns.

Each year I was astounded at the amount I spent just on buying and selling securities in spite of me paying on average only 0,30% per transaction.

About two years ago I took a conscious decision to trade less as I realised that trading cost me at least 0,5% of performance each year and that a lot of investments increased in price, sometimes substantially so, after I had sold them.

My idea that less transactions would equal better performance was confirmed after I read the September 2008 article by James Montier called Going global: Value investing without boundaries