Equity, fixed income and asset allocation fund investors experienced average annual losses for all time periods except the longest (20-year) time frame, according to DALBAR’s annual “Quantitative Analysis of Investor Behavior.” And even those positive returns did not keep up with inflation.
Last year was the year that wiped out wealth, according to a statement issued by DALBAR. “The dramatic events that continue to plague our financial markets have provoked panic, which exacerbates the ongoing carnage,” said Lou Harvey, president. “For 15 years, QAIB has shown that investor returns lag what performance reports and prospectuses would lead one to believe is achievable. While those returns are, in fact, theoretically achievable, the reality is that investors are not rational, and make buy and sell decisions at the worst possible moments.”