Barber and Odean traced the women’s outperformance to the fact that they traded their accounts less. Men on the other hand tended to overtrade their accounts, a behavior the authors take as a sign of overconfidence, a conviction on the part of the men that they can beat the market. The trouble with overtrading is that every time you buy and sell a security you have to pay the bid–offer spread plus any commission, and these costs add up so quickly that they substantially diminish returns.
