As Jeff Kleintop of LPL Financial writes, the average holding period of a stock has fallen from eight years in the 1960s to around five days today.
Much of this is due to the advent of ETFs and high-frequency trading. But there’s little doubt that the average investor is also holding stocks for much shorter periods.
And that comes with consequences.
Here’s a chart and commentary from Kleintop’s latest Weekly Market Commentary:
One of the consequences of such a short investment time horizon is that investors have begun to fear short-term market events and volatility as much or more than the factors that shape prospects for long-term economic and profit growth that drive stocks over the longer term.
Photo: LPL Financial
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