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Learning About Ourselves

MJG
edited February 2016 in Off-Topic
Hi Guys,

In a recent exchange Catch22 asked us about our environment when making investment decisions. Here is the internal Link to that posting:

http://www.mutualfundobserver.com/discuss/discussion/25972/be-in-curious-do-you-have-a-preferred-environment

In my response, I suggested the following question: “If the environment is a key player in the investment decision process, are there National data that document a regional disparity in investment performance? Do folks in San Diego perform better than those in Chicago?”

I now have at least a partial answer. It is the website Openfolio.com. Here is the Link to that site, and it is followed by a Link to some specific numbers of immediate interest within the site:

https://openfolio.com/

https://openfolio.com/by-the-numbers/2014/

With access to a tsunami of data, and computers to process that data, it is not shocking that differences do exist, and that the disparities are identified as this data is sliced and diced in multiple dimensions.

The 2014 numbers show some familiar patterns: the average investor underperformed the S&P 500 by over 50%, some of which can be attributed to portfolio diversification. Also women again outperformed men and older investors outdistanced the younger cohorts.

The Openfolio website also tabulates input as a function of region and even on a state-by-state basis. Performance differences do indeed exist.

Other data within the site shows regional updates for 2015 whereby, in order of superior performance, the Northeast region was the most successful grouping. It was followed by the West and the Midwest regionally. Geographically, the Southeast area was at the bottom of the performance ranking for that year. Of course, performance persistence is a pervasive issue. Please take a look see.

One issue might be the honesty and trustworthiness of the data sources. The data are assembled from volunteer individual investor inputs. Given the asymmetry of willingness to discuss successes and failures, the potential for some fudging exists. The potential nudging aside, this is still a source that I was not familiar with until I asked my earlier question.

I hope you find the reference entertaining, and perhaps even informative.

Best Regards.

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