Evaluating Investment Performance

I recently had a discussion with a colleague about his 401(k) investment practices and performance. He told me that during the first part of this year his account was not doing well and so he started to trade more actively and as a result his performance increased. I asked him what percentage return he had before he started trading and how much had performance increased after he began timing the market. His response was typical of many similar discussions I’ve had; “I don’t know exactly how m...