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Investors prospered by staying the course

johnNjohnN
edited February 2020 in Fund Discussions
Investors prospel by staying the course

https://www.google.com/amp/s/www.stltoday.com/business/local/report-investors-prospered-by-staying-the-course/article_8a368181-c1ac-5665-9ce9-e1c4335ec5d4.amp.html


Investors in “allocation” funds, which hold a mix of stocks and bonds, earned more than the funds themselves, indicating that the majority of investors put more money in the funds when prices were low than when prices were high. Target-date funds, which fall into this group, are likely the main reason for the category’s better performance. These funds, which invest in a mix of stocks and bonds that grows more conservative as investors near retirement, are predominantly held in workplace retirement plans, in which investors tend to hold for the long term and invest at regular intervals.

Investors showed the worst timing when they invested in alternative funds — investments designed to provide returns that aren’t correlated with stock or bond markets. Those funds didn’t benefit from a general upward trend, surrendering an average 0.61% annualized return over the 10-year rolling periods. But investors fared much worse, losing 2.05%




Tdf maybe good ways to go long term

Comments

  • MarkMark
    edited February 2020
    I think you mean prospered v. prospel.
  • Observant1
    edited February 2020
    The default investment in many 401K plans is a target-date fund. Target-date funds are less volatile than equity funds and thus easier to hold for many investors. Also, 401k plan participants frequently utilize dollar-cost averaging when purchasing fund shares and thus avoid timing the market.
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