Investors who have stuck to their long-term asset-allocation strategies during the financial crisis have been getting better investment results than investors who changed course.
Analysts at Fidelity Investments, Boston, have published that finding in a review of investment performance at 20,500 Fidelity client plans from Sept. 30, 2008, through June 30, 2011.
For participants who cut asset allocations to stocks and stock funds to 0 between Oct. 1, 2008, and March 31, 2009, the average account balance increased just 2% between Oct. 1, 2008, and June 30, 2011.
Participants who cut out all equity investments but then put some money back in stocks and stock funds saw their account balances grow an average of 25%.
Participants who held their equity allocations steady watched their account balances climb 50%.
- Allison Bell