Buy low and sell high” says the old adage about investing in the stock market.
But a relatively new type of investment fund is luring unsophisticated investors into buying when values are at their highest, resulting in losses almost immediately, a new study has found.
The lure? Buying into trendy investment areas like cannabis, cybersecurity and work-from-home businesses.
“As soon as people buy them, these securities underperform as the hype around them vanishes,” said Itzhak Ben-David, co-author of the study and professor of finance at The Ohio State University’s Fisher College of Business.