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The referenced article that presents the shortfalls of investor returns relative to market rewards in the 1950s doesn't adequately document this highly persistent pattern. The individual investor shortfall is a reality across all decades. It is surely not restricted to that decade alone.
DALBAR has reported this wealth limiting private investor handicap for many years now. In any given year, individual investors recover only 30% to 50% of equity market returns. We historically do not score well, and very often don't recognize our poor performance.
I suppose we are frequently overconfident of our capabilities in this challenging arena. Even most fund managers underperform. Our hubris limits our ability to properly score ourselves. We don't beat the odds.
Study after study demonstrates that as investors we suck wind big time. I mostly gave up this losing fight a number of years ago. I spend far less time worrying the marketplace and specific investment decisions these days. I'm heavily into Index products. Life is much easier now!
EDIT: It would likely be a good practice to check our Egos before making an investment decision. That's easy to say but is a high hurdle for many of us. Fortunately I was never the smartest person in any and all rooms.
Comments
The referenced article that presents the shortfalls of investor returns relative to market rewards in the 1950s doesn't adequately document this highly persistent pattern. The individual investor shortfall is a reality across all decades. It is surely not restricted to that decade alone.
DALBAR has reported this wealth limiting private investor handicap for many years now. In any given year, individual investors recover only 30% to 50% of equity market returns. We historically do not score well, and very often don't recognize our poor performance.
I suppose we are frequently overconfident of our capabilities in this challenging arena. Even most fund managers underperform. Our hubris limits our ability to properly score ourselves. We don't beat the odds.
Study after study demonstrates that as investors we suck wind big time. I mostly gave up this losing fight a number of years ago. I spend far less time worrying the marketplace and specific investment decisions these days. I'm heavily into Index products. Life is much easier now!
EDIT: It would likely be a good practice to check our Egos before making an investment decision. That's easy to say but is a high hurdle for many of us. Fortunately I was never the smartest person in any and all rooms.
Best Wishes.