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Despite how confident you are about profiting from trading stocks, unfortunately, excessive trading does not usually lead to better outcomes.

Research indicates that overconfident investors tend to trade more frequently. When it comes to finances, men tend to be more confident. As a result, men trade more often than women.

Respectively, male overconfidence that leads to excess trading can do more harm than good.

Brad Baber and Terrance Odean examined this issue in a paper titled: “Boys Will Be Boys: Overconfidence and Common Stock Investment.�

Men trade 45 per cent more than women, which reduces their stock returns by 2.6 per cent. Women trade less, and that only costs them 1.7 per cent.

While a man could consider excess trading to be bold, according to the paper, women understand that investing requires patience.

On a relative comparison, single men are significantly more confident than single women, and as a result, their underperformance is worse than the figures mentioned above, according to the research.

This information can be useful in considering how you might manage your investments. I recommend taking a longer-term approach to investing.

Trade when your circumstances change or when it’s time to rebalance your portfolio back to your target balance, considering how to divide your assets between stocks and bonds.

Some trading is necessary, but excessive trading should be avoided. Additionally, excessive trading can result in higher trading costs. Additionally, in taxable accounts, it may generate an income tax liability.

Try to resist the temptation to be an active trader.