DALBAR Study Shows Mutual Fund First: Equity Investors Beat S&P in 2004.BOSTON -- The average equity mutual fund investor beat the key market average by improved investor behavior and market conditions that could be described as a "perfect storm". The average investor earned 12.6% in 2004, while the S&P 500 total return was 10.9% Average investors earned more in 2004 than the hypothetical Hypothetical is an adjective, meaning of or pertaining to a hypothesis. See:
pl.n. Alternating periods of good and bad fortune or spirits. ups and downs Noun, pl alternating periods of good and bad luck or high and low spirits of the 2004 market. Unlike earlier patterns of behavior, when investors withdrew funds as the S&P declined, 2004 showed continued new investments throughout the year. The investments that were put in play during the downtrending months catapulted into huge gains in the post-election boom. The late 2004 surge pushed 20-year investor returns ahead of inflation and buoyed the shorter three and five year returns past the S&P 500. These findings were derived from DALBAR's annual Quantitative Analysis Quantitative Analysis A security analysis that uses financial information derived from company annual reports and income statements to evaluate an investment decision. Notes: of Investor Behavior (QAIB) study of 2005. While investors still displayed the imprudent im·pru·dent adj. Unwise or indiscreet; not prudent. im·pru  dent·ly adv. behavior of selling after a decline, as
the 2004 data in the following table shows, the trend was diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. from earlier periods. (Note lowered inflows following April and July downturns.) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- $B Net Flow 43 27 19 23 1 14 10 2 13 8 22 29 ------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- % S&P Return +1.8 +1.4 -1.5 -1.6 +1.4 +1.9 -3.3 +0.4 +1.1 +1.5 +4.1 +3.4 ------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- QAIB 2005 introduces new investor behavior data including asset allocation funds asset allocation fund An investment company that varies the proportion of its portfolio devoted to stocks, bonds, and money market securities in order to reduce the variability of returns and to take better advantage of different segments of the securities , retirement savings requirements, a "Guess Right Ratio", impact of investment selection, and a new table for communicating risk. QAIB 2005 is available by contacting DALBAR at 617-723-6400 or at QAIB@DALBAR.com DALBAR, Inc., the nation's leading financial-services market research firm, is committed to raising the standards of excellence in the financial-services industry. With offices in both the US and Canada, DALBAR develops standards for, and provides research, ratings, and rankings of intangible factors to the mutual fund, broker/dealer, discount brokerage A discount brokerage is a business that charges clients significantly lower fees than traditional brokerages, typically offering comparatively fewer services and/or advice. , life insurance, and banking industries. They include investor behavior, customer satisfaction, service quality, communications, Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the services, and ratings of financial-professionals. |
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