Your investing behaviors are probably costing you thousands of dollars per year. This article by Rick Kahler discusses the findings of the annual Dalbar study, which I have been following for years. In this article, Rick points out some of the unhealthy money behaviors that many investors have – usually thinking they are making smart investment moves.
Let me know if you have questions or comments.
If you had half a million dollars and invested it in mutual funds, chances are you would leave $25,000 a year of potential income on the table. Over 20 years, that under-performance could cost you over $1,000,000 when you include reinvestment.
This conclusion is based on a recent study by Dalbar, Inc. It found that mutual fund investors (individuals and investment advisors) consistently earn below-average rates of return. This group’s average annual rate of return for 20 years underperformed the average by over 5%.