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.