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Chart of the Day: Holding Period

chart shows 1920 to 2005, data shown by black line

Contents

Today’s Chart of the Day is from Dresdner Kleinwort Macro Research and notes the average holding period of stocks since 1920.It went from a high of seven years in the 1960s to less than one year we see today.

The first decline in the 1960s was from the increased use of mutual funds, which attracted the longer-term investors. The second downward trend started after the government passed rule 19b-3 in 1975 which ended fixed commissions rates on stocks. This increased competition and investments in technology results in the nearly zero trading costs we have today.