You\u2019ve probably imagined it. The morning after your last day at work, you sit down with a coffee, open the portfolio, go through it line by line. No rushing, no squeezing it in between meetings. You\u2019ll finally have time to make considered, informed decisions about your money.<\/p>\n
It sounds like a sensible idea, but new research suggests otherwise.\u00a0<\/p>\n
A study from Umea University in Sweden tracked 59,000 investors over five years either side of their retirement. The researchers used detailed tax records to compare how they behaved before and after they stopped working. After retiring, investors traded nearly 8 per cent more frequently and held more individual stocks. And their risk-adjusted returns declined.<\/p>\n
Not because they became less intelligent or stopped caring, but because the thing that had been quietly protecting them was the lack of time. A full working day left little room to check prices, react to headlines or tinker with a portfolio. That constraint, it turns out, was a guardrail \u2014 and retirement removed it.<\/p>\n
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Why time to think isn\u2019t necessarily good<\/p>\n
The study worked as a natural experiment. Retirement creates a sudden, measurable jump in leisure time, so the researchers could isolate what that extra time did to investment behaviour. The sample was large, the data came from tax records and the same people were tracked before and after they stopped working.<\/p>\n
With more hours in the day, retired people read more financial news, monitored their portfolios more closely and traded more often. They did not become reckless, they became engaged. They broadened their holdings, picking up more individual stocks. To anyone watching, it would have looked like diligent, informed investing.<\/p>\n
But the engagement did not translate into better results. Despite all that extra attention, returns got worse. The researchers\u2019 conclusion was blunt: time alone is not enough. Without better skills, better tools or professional guidance, more hours spent on a portfolio meant more opportunities to make costly decisions.<\/p>\n
This is the part that stings. The retired people were trying harder than ever but the evidence says that\u2019s exactly what makes things worse.<\/p>\n
A pattern that repeats <\/p>\n
This isn\u2019t just a retirement story. During the Covid lockdowns, a younger generation discovered the same thing. Stuck at home with time on their hands, millions opened brokerage accounts, piled into meme stocks and traded with the confidence of people who had never lived through a proper downturn. As research in the US showed, most of them lost money. <\/p>\n
The mechanism was identical: free time, easy access and the dangerous conviction that paying attention to markets is the same as understanding them.<\/p>\n
The academic evidence has been saying this for more than 25 years. A study by researchers Brad Barber and Terrance Odean tracked 66,000 US households and found that the most active traders earned 11.4 per cent a year. The market returned 17.9 per cent. <\/p>\n
A separate study by Odean \u2014 who, like Barber, is a University of California professor \u2014 found that stocks sold by investors went on to outperform the stocks they bought. The trading itself was the problem.<\/p>\n
The principle holds across decades, countries and age groups. Age and intelligence don\u2019t come into it. Activity does: every trade carries costs, triggers tax consequences and introduces the possibility of bad timing. Doing more almost always means earning less.<\/p>\n
How to protect your portfolio from yourself<\/p>\n
If you were unaware that the guardrail of a busy working life protected your investments, the task in retirement is to rebuild that guardrail deliberately \u2014 not by ignoring your money but by creating friction between the impulse to act and the act itself.<\/p>\n
Start with a schedule. Decide now that you\u2019ll review your portfolio no more than once a quarter, on a fixed date, and not in between. Delete the app from your phone if you have to. The goal is to make checking your investments a conscious decision rather than a habit you drift into.<\/p>\n
Next, write down the circumstances under which you would sell. Your financial needs might change, for example, or your mix of investments might have moved well away from where you want it to be.<\/p>\n
Finally, think about where your temptation points are. If you hold 15 stocks, that\u2019s 15 earnings reports, 15 price swings and 15 reasons to log in and do something. You don\u2019t have to stop picking stocks, but for the portion of your portfolio that\u2019s there for long-term growth rather than active interest, a low-cost global equity tracker removes the urge to tinker.<\/p>\n
You will have more time in retirement. But more time spent on your portfolio doesn\u2019t produce better decisions. It produces more decisions \u2014 and more decisions, in investing, usually means worse outcomes.<\/p>\n
Your working life gave you a gift you never asked for: lack of time to damage your own portfolio. Now you\u2019ll need to replace it on purpose. Do less, then go and do something more interesting with all those free hours.
Robin Powell is a journalist and campaigner for change in investing<\/p>\n","protected":false},"excerpt":{"rendered":"You\u2019ve probably imagined it. The morning after your last day at work, you sit down with a coffee,…\n","protected":false},"author":2,"featured_media":523030,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":{"0":"post-523029","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-personalfinance","12":"tag-uk","13":"tag-united-kingdom","14":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/523029","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=523029"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/523029\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/523030"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=523029"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=523029"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=523029"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}