Having invested in real estate for 20 years and helped investors buy properties for the last 13, I see the «make your money on the buy» saying hurting
the average buy and hold investor a lot more than helping them.
So while
the average Buy and Hold investor would be sitting on a 7.5 % loss today, the «10 % Trader» could be breaking even.
Not exact matches
Of course, it includes a lot of assets that an
average investor can't easily
buy — including big stakes in privately
held companies
and infrastructure facilities like toll roads
and airports, to name just a couple.
Of course, there are always exceptions, but on a
buy -
and -
hold basis, they don't appear as attractive to me for the
average investor that doesn't have a high level of knowledge about macroeconomics
and usage trends of metals versus inventory levels, for example.
They define a «performance gap» between the time - weighted (
buy -
and -
hold) return
and the dollar - weighted (actual
investor average) return as the measure of
investor timing ability.
That said,
buy -
and -
hold investors will need to proceed cautiously, as the healthy share - price gains already racked up across much of the industry leave most of the railroad stocks with below -
average appreciation potential to 2017 - 2019.
@Doctor Stock: Perhaps «
buy -
and -
hold» is crazy strategy for your
average DIY
investor.
The
average investor beat
buy -
and -
hold by 3 %.
There is a profound difference between the returns that a
buy -
and -
hold investor receives,
and that which the
average investor receives.
The adding of money late,
and the disproportionate selling after the problems of 2011 led the dollar weighted returns, which is what the
average investors get, to lag those of the
buy -
and -
hold investors by 5.57 % / year over the period that I studied.
Juicy Excerpt: The vast majority of middle - class
investors following
Buy -
and -
Hold strategies will earn a return significantly less than the
average return of 6.5 percent real.
Yield to Maturity (
Average YTM) The percentage rate of return paid on a bond, note or other fixed income security if the
investor buys and holds it to its maturity date.
We emphasize that, on
average, all mutual fund
investors underperform the
buy -
and -
hold return; the gap between their actual dollar - weighted returns
and the funds» reported time - weighted returns is always negative on
average.
In fact, the
average value
investor underperforms a
buy -
and -
hold investment in the S&P 500 by — 92 bps.
For the NASDAQ market between 1973
and 2002,
buy -
and -
hold outperformance
averaged 5.3 % a year, due in large part to
investors jumping late on the tech bandwagon
and then catching the brunt of the dot - com collapse.
It found that a
buy -
and -
hold approach outperformed actual
investor returns by an
average of 1.5 % a year.
What I like about
buy -
and -
hold is that it tends to match what the
average investor can do.
Executive Summary The authors examine the difference between mutual funds»
buy -
and -
hold, or time - weighted, returns
and the
average dollar - weighted returns, or IRRs, that are earned by end
investors over the January 1991 — June 2013 period.
What that implies is that the
average investor in a hedge fund typically does worse than a
buy -
and -
hold investor.
On
average, over the 32 - year study period,
investors lost nearly 14 % of the value strategy
buy -
and -
hold return simply by embracing
and shunning value managers at the wrong time.
As such,
average investors in ETPs tend to lose money relative to
buy and hold investors.
The first reveals what an
investor who
bought and held from the beginning earned, versus what the
average dollar invested earned.
That gives a difference of 6.24 % of how much
average investors earned less than the
buy -
and -
hold investors.
Buffett: «The
average investor should be quite happy with 7 % per year in an index fund if he just
buys periodically
and holds on.»
They could offer the lowest cost Canadian index,
and give our market some much needed competition to lower fees
and give the
average investor good advise like
buy a low cost index fund
and hold it.
Versus a
buy -
and -
hold investor, the
average holder gives up almost 3 % of returns via market mistiming.
As for her investments, Gray believes Sarah is doing fine as a DIY -
investor, noting her
buy and hold strategy is currently yielding above -
average returns.
This article highlighted how much
average investors lose relative to
buy -
and -
hold investors in the S&P 500 Spider [SPY].
Most of the studies that I have done on investment in mutual funds of all sorts, including ETFs, show that
buy -
and -
hold investors typically do better than the
average investors in the mutual funds.
It talks about an issue I have been writing about for a long time — the difference between what a
buy -
and -
hold investor receives
and what the
average investor receives.
Buying and selling have to be properly timed, because the
average investor tends to do worse than the
buy -
and -
hold investor.