‘An Antidote to Economic Sclerosis’ — Short-Term Investors Aren't All Bad, Study Finds
Short-term investors are widely seen as bad for they companies they invest in, because they are likely to focus on immediate changes in stock value — potentially at the expense of the company’s long-term profitability. But new research suggests that there may be times when a short-term focus can actually help companies perform better over the long run. The study, expected to be published in the scholarly journal Management Science, found that companies with more short-horizon investors — who trade stocks regularly — adapted more quickly when their competitive environments changed “radically.”