However, crowdfunding has democratized real estate investing to allow participation
from average individual investors.
Not exact matches
Professional traders have used leveraged money
from brokers and lenders to invest in exchange - traded funds and other stocks for decades, but this tactic can be ruinous for the
average individual investor who is not careful, say investment and finance experts.
The following chart, taken
from the paper, depicts the
average asset mixes of self - directed and advised
investors based on equal weighting of
individual portfolios.
And so, he did extensive research including the research
from Dalbar, taking a look at the inflows and outflows of equity mutual funds of the
average individual investor.
In a recent post Felix Salmon at Reuters talks about how
individual investors, on
average, were harmed as their savings shifted over time
from defined benefit to defined contribution plans.
One piece of evidence I already covered is the dismal 2.3 % annual return of the
average individual investor from the J&P Morgan graph above, as compared to the 7.7 % annual return of the S&P 500 over the same period.
For example, the
average individual investor only got a 2.3 % annual return
from 1997 to 2016, which includes 3 years of the late 1990s tech bubble market.
For the
average investor, this is a good trade as you can limit your risk, especially if one company goes bankrupt and you will lose everything by picking an
individual stock
from them.
Because the
average risk - averse
investor holds the
average portfolio asset allocation, this becomes the starting point in determining how a specific
individual's portfolio might diverge
from that
average allocation.
When you consider the breadth of
individuals and depth of talent dedicated to investing in this country, not to mention globally, it becomes pretty obvious that we are just «
average»
investors and shouldn't expect to be anything more
from a returns perspective.
Because the
average risk - averse
investor holds the
average portfolio asset allocation, this becomes a reference point in determining how a specific
individual's investment portfolio asset allocation might diverge
from that of the
average investor's asset allocation.