Average Investor Underperforms the S&P 500 By 7 Percentage Points According to Dalbar Study

By on February 13, 2009

Behaviorgap.com has an interesting article pointing out that investors don’t perform well against the market by searching for better investments, but by behaving better. The latest results of the 20 year Dalbar study are mentioned which shows that for the 20 year period ending 2007 the S&P 500 returned an average of 11.81% per year, while the average investor returned 4.48% per year over the same period. Further evidence that the typical investor shoots themselves in the foot by buying high and selling low.

Sources:

http://www.behaviorgap.com/outperform-99-of-your-neighbors/

http://www.thorntonwealth.com/storage/library/DALBAR%20QAIB%202008.pdf

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