Jim Glassman is the executive director of the George W. Bush Institute and a contributing columnist for Kiplinger’s Personal Finance Magazine. Check out the August issue for his latest column. I am unabashedly a fan of Mr. Glassman, since he espouses an investing point of view that I embrace. Simply stated, his belief is that, if you are an individual investor, you should hold onto your stocks longer and trade less often. Warren Buffett is a devotee as well, since he said that “Much success can be attributed to inactivity.”

Two professors at the University of California at Davis, Brad Barber and Terrance Odean published a study in 2000 in the Journal of Finance titled, “Trading is Hazardous to Your Wealth.” A key element in this study was their examination of the records of more than 60,000 customers of discount brokerage firms. They discovered that the most active security traders averaged rates of return that were 30 percent less than those of the average customer, and 36 percent of the average of the overall stock market.

This incidence of trading is a factor in the selection of mutual funds as well. A study by Roger Edelen, Richard Evans and Greg Kadlec found that the average U.S. stock fund expense ratio was 1.19 percent over the period from 1955 through the end of 2006. This trio also found that the trading costs in these funds added another 1.44 percent of expenses, and these trading expenses are difficult to track, since they aren’t transparent.

What are we simple investors to do? Well, one solution is to examine a fund’s turnover rate. A 100 percent turnover rate would mean that the securities that comprise a stock fund would be sold and replaced every 12 months. Turnover rates are required to be published annually by every fund (I use Morningstar.com, but other sites have this data as well), and this turnover rate is a good way to gauge the trading costs that a stock fund will incur. A low turnover rate generally translates into lower aggregate trading costs.

Glassman’s list of high-performing U.S. stock funds with low fees and low turnover rates includes: the Yacktman Fund (YACKX), with annualized returns of 14 percent over the past five years, and its turnover rate is just 7 percent, which means that it holds a stock for 14 years, on average. The Nicholas Fund (NICSX) has a turnover rate of just 25 percent and has average 10.2 percent annualized over the last five years. Check out Morningstar.com for others.

On another topic, it is getting to the point that your cell phone number may be as valuable as your cash or credit card, due to the emergence of a recent phenomenon known as mobile cramming. This sort of thing occurs when a third party signs you up for a service that you were unaware that you were on the hook for. Perhaps you visited a web site that offered to send you your daily horoscope to your cell phone. Following that, you might receive a follow-up text message that says, “Reply stop if you don’t want this.” Naturally, you think the message is spam, so you delete it, and voila, you have just signed up for these recurring charges that can be $10 each month. If you cell phone bill has multiple pages, you could easily overlook such charges.

It is important to review your cell phone bill each month to ferret out any bogus charges. If you find any, report them to your carrier and request that they block any billing for third parties. John Breyault, a vice president at the National Consumers Leagues in Washington, D.C., recommends that if you have a problem with mobile cramming, report it to the League via their online complaint form at www.fraud.org, and they will share the information with 90 law-enforcement and consumer-protection agencies, include the Federal Trade Commission and the Federal Communications Commission.

Got a financial planning article for Greg? You may email him at greg@lifesolutionsonline.net.

Greg Roberts is a certified financial planner with 35 years of financial and estate planning experience.