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What Did the Average Investor Earn in 2019?

What did the average investor earn in 2019? Using the Dalbar study for 2019 Paul L. Moffat presents investor behavior trends that are revealing to the average investor's performance vs the broad market.

Full Transcript:

Hello, welcome to Arista Advice. Hope you're well in light of the COVID-19 pandemic.

The question of the week is: Paul, what did the average investor earn in 2019?
Recently we received the Dalbar study, which is a Boston-based consulting company that have been studying the average investor for many, many, many years, and they concluded this: In 2019 the average investor earned 26.14 when the broad  market did 31.49, a difference of over 5%.
On the 3-year, the average investor did 11.5, and the broad market did 15.27.
On a 5 year, 7.79 compared to 11.70.
The average investor did 9.43 compared to 13.56.

As you can see the numbers demonstrate that the average investor continues to make mistakes and cause destruction to their own financial wealth and well-being. It is so important to stay invested. There is a litany of list of reasons why to get out of market and to give way to short-term media events like we're  seeing right now.
It is important to stay disciplined in an undisciplined world and to be structured in an unstructured world.

Hope that this information is helpful. We're here to guide and lead you through this COVID-19 pandemic. We look forward to talking to you soon.