Why Is The Average Investor’s Performance So Poor?

Author: Chas Boinske

Charles P. Boinske, CFA, is a 30 year investment management veteran overseeing the strategic direction and portfolio management process for Independence Advisors, LLC. Have a question for Charles? CLICK HERE TO ASK CHARLES

April 11, 2012  |  

Why Is The Average Investor’s Performance So Poor?

The data is conclusive. The average investor’s returns are, umm, below average. How can this be? What appears to be statistically impossible is due to two basic factors, investment discipline and costs. Over the last 20 years, the average stock investor earned 3.49% compared to the S&P 500’s return of 7.81%. A $100,000 investment in […]

April 2, 2012  |  

The Perils of Market Timing: Part 2

For many investors, the temptation to try to time the stock market is irresistible. However, for most investors, market timing is as dangerous as it is irresistible. In my last market timing post, I discussed the downside of missing a few good return days. In this post, I discuss the downside of trying to time […]

March 26, 2012  |  

Is There Value In Morningstar Ratings?

Morningstar is a US-based research firm that publishes stock and mutual fund data. The firm is widely known for its mutual fund “star” rating system. The system rates mutual funds according to a five-star system, with five stars indicating superior performance for the time period. Although Morningstar warns against choosing funds solely on its star […]

March 6, 2012  |  

The Perils of Market Timing

Missing just a few days of high returns in the stock market can substantially erode long-term performance. The harsh reality of market efficiency has not stopped speculators and other traders from attempting to read the future. On paper, market timing offers a seductive prospect: By predicting market direction ahead of time, a trader might capture […]

February 6, 2012  |  

Five Key Concepts for Financial Success

While investing can at time seem overwhelming, the academic research can be broken down into what we call the Five Key Concepts to Financial Success. If you examine your own life, you’ll find that it is often the simpler things that consistently work. Successful investing is no different. However, it is easy to have your […]

January 27, 2012  |  

Fear, Greed and Investment Decision Making

Fear and greed cause investors to make bad decisions. Meir Statman is a pioneer in behavioral finance, the branch of economics that considers the influence of emotions on investor decision making. We had the opportunity to interview Meir after seeing his presentation at a recent conference. Among other things, he discussed: How framing and hindsight […]

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