A recent study from John Bogle indicates that retail investors are making miserable buy and sell decisions with exchanged traded funds (ETF).
The study looks at the difference between between an ETF's return and the returns of the average dollar invested in those funds. In other words, the study looks at the difference between the fund's return over a particular time frame and the return to the average investor in the fund who made buy and sell decisions over that same period.
The study encompasses 79 different ETFs across a broad range of asset categories. The duration of the study is five years.
Similar to results seem with mutual funds, the study clearly indicates that retail investors are harming themselves by buying and selling at the wrong times:
- 68 out of the 79 funds had investor returns that lagged the returns of the funds themselves.
- The investor lag ranges from -.4% to -17.9%.
- Results were worst in some of the more volatile sectors such as financial services.
Source: Index Universe
- Log in to post comments
