http://www.qaib.com/public/downloadfile.aspx?filePath=freelook&
this report has been cited very often recently. The key finding is that
verage investor in all U.S. stock funds earned 3.7% annually over the past
30 years—a period in which the S&P 500 stock index returned 11.1% annually.
How so? "the biggest factor is that investors chase returns—jumping aboard
after a streak of hot performance and diving over the gunwales after it goes
bad. Because of that buy-high, sell-low behavior, investors in the typical
fund have a lower average return than the fund itself." -- Jason Zweig http://blogs.wsj.com/moneybeat/2014/05/09/just-how-dumb-are-inv
This result points to investor behavior as the culprit of poor returns. Don'
t blame others. And also even if you use index as your investment, you can
still be screwed.. by yourself.
How rigorous is the method used in the study? I can't judge. But some seems
to think the study is flawed. see http://www.kitces.com/blog/does-the-dalbar-study-grossly-overst
