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JonathanRoth writes,

You missed this comment in my OP: (before index funds were mainstream)

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No. I saw that.

When you look at the Dalbar study, the average investor earned 2.1% over the twenty year period ended Dec. 31, 2011.

The S&P 500 returned 7.8%, while the Barclays Capital US Aggregate Bond Index returned 6.5% over the same time period. A 50/50 blend of these two asset classes would have yielded a nominal annualized return of 7.2%.

After including inflation, the average investor got a negative real return. Inflation (CPI) grew at an annualized rate of 2.5% during the period. So the average investors' net real return was -0.4%. The average investor is not very good at capturing the market return of a simple balanced portfolio, never mind outperforming it.

https://www.thestreet.com/personal-finance/average-investor-...

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Just wanted to emphasize, that it's not your return (i.e., the average investor), it's what you can get by basically doing nothing by owning an index fund that should be benchmarked against the advisor's performance.

intercst
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