Why are most people bad at investing?

Why are most people bad at investing?

In our previous blogs, we have provided theoretical and empirical evidence that broad-based indices outperform most active managers (see here, here and here). In this blog, we argue that the average investor in the U.S. significantly underperforms broad-based indices. Dalbar’s (2017 QAIB Report) analysis shows that the 30-year annualized S&P 500 return was 10.16% while the 30-year annualized return for the average S&P500 investor was only 3.98% -- a gap of 6.18% annualized.