Why individual investors average only 2.5% returns

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I recently read a study on the investment returns over the last 20 years of a number of different investment asset classes. The results ranged between 4 and 11 percent per year. However, the typical investor only averaged 2.5 percent. The reason for the difference is people tend to do one of these things:

They panic when the value temporarily declines.
They sell what is not doing well, to buy what is doing well, only to discover those assets just changed their behavior.
They over concentrate in one asset category and are not diversified.

We can help you avoid making these mistakes. Please call our office if you have any questions.

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