A Disconnect Between Perception and Reality
S&P 500 Index annual returns(1) and Franklin Templeton Investor Sentiment Survey results(2)
Investor returns have been lower than market returns
When we base our decisions on perceptions instead of facts, we’re bound to make mistakes. This may explain why, over the past 10 years, the average investor hasn't done nearly as well as the index.
Investor Returns Vs. Market Returns3
10-year period ended December 31, 2017
These charts are for illustrative purposes only and do not reflect the performance of any Franklin Templeton fund.
Sources:
1. Morningstar.
2 .2010 Franklin Templeton Investor Sentiment Survey conducted in partnership with ORC International of at least 1,000 US adult respondents.
3. S&P 500: Morningstar; Average Equity Investor Annualized Return: “Quantitative Analysis of Investor Behavior, 2017,” DALBAR, Inc. DALBAR uses data from the Investment Company Institute (ICI), Standard & Poor’s, Bloomberg Barclays Indices and proprietary sources to compare mutual fund investor returns to an appropriate set of benchmarks. The study utilizes mutual fund sales, redemptions and exchanges each month as the measure of investor behavior. These behaviors reflect the “Average Investor.” Based on this behavior, the analysis calculates the “average investor return” for various periods. These results are then compared to the returns of respective indices.
Indexes are unmanaged and one cannot invest directly in an index. Most recent data available.