#FakeNews In Investing


zerohedge.com / by Tyler Durden / Feb 16, 2017 6:05 PM

Submitted by Lance Roberts via RealInvestmentAdvice.com,

#FakeNews In Investing

I regularly push back on the “buy and hold” investing meme because while it works in “theory,” reality has a far different outcome. This is not my opinion, it is the reality of human emotion and psychology as it impacts portfolio management over time. The annual Dalbar Investor survey shows the massive performance lag of individuals not only in the short-term but in the long-term as well. To wit:

  • In 2015, the 20-year annualized SP return was 8.19% while the 20-year annualized return for the average equity mutual fund investor was only 4.67%, a gap of 3.52%.

Here is a visual of the lag between expectations and reality.