Unless you don’t watch television news, Sunday morning talk shows, late-night comedy shows, or read book reviews or online news pages you might have missed the big coverage about Michael Lewis’s new book, Flash Boys—a Wall Street Revolt. It’ has created quite a conversation about high-speed trading that gives some traders a few milliseconds of advantage over traditional trading, perhaps pennies per share. This can add up for some serious institutional traders and investment banks who trade frequently.
I have often preached the folly of trying to time the market. Trying to get in at the absolute bottom or out at the very top is a fools game that no one wins over time. High-speed trading is similar in that it tries to give a trader a microscopic advantage. The real concern for your retirement portfolio as an investor, not a trader, is having the right mix of asset classes at approximately the right time over time. So, unless your vision of retirement is to become a day-trader or even a frequent trader, this whole issue of high-frequency trading is not a big deal in the long run.
And if you do find yourself wanting to trade frequently, I strongly recommend you revisit Chapter Two about finding your retirement vision.