By Michael G. Rivas via Iris.xyz
Most people invest in order to grow wealth over time. It’s only natural to want the biggest returns possible as part of that process.
But focusing on returns isn’t necessarily a sound investment strategy — and it could be part of what leads average investors to perform so poorly.
In fact, average investors don’t just fail to get big returns. They tend to underperform market indices that they invested in, like the S&P 500. In 2015, the S&P 500 index outperformed average investors by 3+% percent and they did the same with the Barclay’s Bond Index!
Theoretically, that shouldn’t happen. An index simply tracks the market. Investors are getting beat up trying to beat the market.
And that’s where they get into trouble.
WHY YOU SHOULDN’T TRY TO BEAT THE MARKET
These investors are actively involved in their investments. They constantly watch the market (or the news, or both) and try to predict the best moves to make in order to earn the biggest return.
Click here to read the full story on Iris.xyz.