Investors Consistently Underperform Passive Investing

Updated: Mar 30



Transcription:


0:07

So this is one of my favorite graphs, because it reinforces with an actual study in actual numbers, why not to do many of these emotional and behavior linked activities. So the bar chart on the bottom lists, asset class performance, a variety of asset class performance, and it's a 1998 to 2018 - 20 year time horizon.


0:32

With that it, you know, does catch the bulk of the tech bubble bursting, and then certainly the global financial crisis. And so you see, maybe a slight relative to long term averages, lesser amount of performance for equities, relative to other asset classes, but largely, I would generally ignore most of this information.


0:53

The reason why I share this piece and the reason why I like it so much, is it highlights that the average investors experience Participating in global financial markets is dramatically lower than that, that passive investments in index based exposures over time provide. I believe this is because there is often limited or no investment plan and that behavior and emotion drives most investors investment decisions.


About WealthFactor: A Lake Oswego based investment adviser and wealth manager serving local high net worth and ultra-high net worth investors. Founded on the idea that high fees force unnecessary risks when providing investment advice. By leveraging the investment methodologies of the largest passive and rules-based asset managers, WealthFactor seeks to pass on the benefits that efficiency provides through financial technology on to its clients. WealthFactor offers custom investment advice services conveniently through separately managed accounts in each investor’s name. For more information visit www.wealth-factor.com.

About Bill Woodruff: WealthFactor’s founder has been investing in publicly traded financial markets for over 20 years. His career includes founding an alternative investment manager, launching and managing a mutual fund and serving as a managing director of a publicly traded investment manager. With over a decade of experience serving high net worth investors Bill skillsets uniquely blend an understanding of investor needs with an extensive background in financial markets and investing.

Disclosures

AdobeStock_301869761.jpeg

525 3rd Street, Suite 230

Lake Oswego, Oregon 97034

  • Facebook
  • Twitter
  • YouTube
  • LinkedIn
  • Instagram

2020 BY WEALTHFACTOR a Registered Investment Advisor - All Rights Reserved