How can you know what you don't know? That is the problem at the
heart of getting people professional help with investing. Well, it's one
of them anyway.
A Harris Poll released earlier this month found that three-quarters
of the population say they are concerned about having enough money to
retire, but less than half of the poll respondents say they need
guidance on investing their savings.
Evidence points to the possibility that maybe people need a little
bit more help than they think. This year's Quantitative Analysis of
Investor Behavior from DALBAR, a financial services market research
firm, showed, again, that investors tend to be their own worst enemies.
The average stock investor got a return of 25.54 percent in 2013
compared to 32.41 percent for the Standard and Poor's 500 benchmark
index. In a year where it was hard to pick the wrong stocks, people
probably took on more risk than was necessary, according to DALBAR's
analysis.
But, the rubber meets the road when the market declines. That's when
the most egregious investor mistakes are made, DALBAR reports. Not
coincidentally, that is when investment advisers earn their keep as they
advise clients to stay the course and talk them out of rashly selling
investments when the market is down.
