Morningstar recently released the annual update to their “Mind the Gap” study, which looks at how well investors do with various categories of mutual funds. That is, it specifically looks at how investors do as compared to the investments — looking to see whether investors make good or bad decisions with the timing of their purchases and sales.
You can find the writeup
here. (You’ll need a free Morningstar account to read the article.)
As they have found repeatedly, investors do best with “allocation funds” (i.e., funds that hold a mix of stocks and bonds — balanced funds, target-date funds, etc). Because such funds are not as volatile, people have an easy time simply buying them and holding on to them.
I’ve been saying
years based on my own experience, and I hear the same thing over and over again from readers.
Other Recommended Reading
Thanks for reading!
How do I find a financial advisor? How much should financial planning services cost? How do I evaluate financial advisor candidates?
These and other similar questions come up a lot in my emai..