The famous study saying dead people make the best investors never existed, but the lesson holds; here's what you need to know

The famous idea that dead people make the best investors reportedly circulated in 2014 following a conversation between investment manager James O'Shaughnessy and Bloomberg Radio host Barry Ritholtz. O'Shaughnessy recalled that a new employee at his firm had told him about a Fidelity study examining which customer investment accounts performed best. According to an anecdote, the best-performing accounts belonged to people who had forgotten that they even had Fidelity accounts.

Ritholtz interrupted with the remark that "They are dead." O'Shaughnessy replied that "No, that's close though," and clarified that he was referring to forgotten accounts. The exchange reportedly helped popularise the idea that dead investors outperform living ones because they do not constantly interfere with their investments.

Is it still relevant?

Although the famous Fidelity study has no verified research behind it, but the idea that investors can hurt their returns by trading too frequently had academic support. In 2000, researcher Brad M. Barber and Terrance Odean published a study examining the stock market performance of individual investors, which found that investors who traded more frequently tended to earn lower returns than those who traded less.


ALSO READ: What are Warren Buffett's views on investment in gold? Here's why he has maintained a different approach towards the precious metal

Can staying invested make a difference?

Investors who leave their portfolios untouched avoid taking unnecessary decisions, which was one of the central arguments behind the dead-investor anecdote. In a JPMorgan Asset Management example cited in CNBC's April 2025 article, an investment of $10,000 in the S&P 500 would have grown to nearly $72,000 if held throughout the 20-year period. Missing the 20 best trading days would have left approximately $20,000.

ALSO READ: Meet Jamie Siminoff, who spent his last $20,000 on a Shark Tank pitch but got rejected; how he went on to sell Ring to Amazon for $1 billion; know his career journey

What financial experts say about investor behaviour?

CNBC quotes Brad Klontz, a financial psychologist, certified financial planner and member of CNBC's Advisor Council. Klontz identifies human behaviour as a major threat to investment returns. He discusses investors selling investments during a panic and buying when they become excited about the market. Barry Ritholtz also discusses how people's instinctive reactions can lead to emotional decisions during market movements.