Dalbar Inc., the financial community’s leading independent expert for evaluating investor performance released its 2018 report:
The average equity fund investor lost 9.42% last year!
According to Dalbar Inc., over the past 5 years, the average equity investor has underperformed the market by 4.35% annually. Over the past 10 years, by 3.46% annually. And over the last 30 years, by 5.88% annually.
History shows that investors are too complacent to sell during good markets and too scared to buy during bad ones. The behaviour is typical, one of missed opportunities, poor decision making and substandard returns. They jump in and out of the market, hoping to be in for the rallies and out for the corrections. Instead, they are in for the corrections and out for the rallies.
Richard Bernstein, a former chief investment strategist at Merrill Lynch says: “What’s shocking is that simply by investing, most people actually made themselves poorer. They’re just shooting themselves in the foot, over and over.”