Download the 2019 DALBAR Study (Exclusive)!
To download the 2019 version of the DALBAR Study, click on the following link:
The DALBAR Quantitative Analysis of Investor Behavior (QAIB) study is my favorite independent study that comes out every year. I’ve very thankful to DALBAR for once again allowing me to be the EXCLUSIVE source in the industry where advisors can download it for free.
Why is this my favorite study? Because it gives us the historical returns of how the “average” investor has done over the last 1-, 5-, 10-, and 20-year periods.
What’s new with this year’s study?
They added an investor fund flow chart for 2019. It shows when investors put money into the market and why they took it out in 2018. It’s a pretty interesting chart. It shows that the Average Equity Fund Investor withdrew funds every month in which the S&P 500 had a material gain and the only month the average investor made a significant contribution was a month where the S&P lost approximately 2.5%.
The last 5-year numbers are very interesting
-The “average equity investor” over the last 5 years has earned only 3.96%.
-The “S&P 500“ has averaged 8.49% over the last 5 years.
-The “average asset allocated” portfolio over the last 5 years has earned only 1.50%.
Why does the “average equity investor” do so much worse than the S&P 500?
That’s really what the study is all about. What does the “average investor” do in the real world when stuff happens (like when the stock market is crashing)? The average investor (and many advisors) has proven to be very good at buying high and selling low. Investors panic sell at the wrong times, which is outlined in the study.
Even though the market has been doing well the last ten years, the average investor the last few years has guessed wrong about when to be in or out of the market.
That’s the beauty of this study if you are an advisor. You can give the study to clients and then have a discussion with them as to whether they should be investing their money on their own or should be doing so with the help of an advisor.
If you are an insurance agent, you would talk about index products that lock in the gains and where the money never goes backwards due to downturns in the stock market.
Whether you are an insurance agent, financial planner, RIA, etc. this is a report you must read and should use to educate clients.
EXCLUSIVE access to the Study– again, there is nowhere in the industry you can download this study for free except through my newsletters. As such, if you have friends or colleagues who you think can benefit by getting their hands on a copy, please forward them this newsletter. They will be glad you did.
Roccy DeFrancesco, JD