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Average Investor 20 Year Return Astoundingly Awful

The average investor's 20 year annualized return is astounding simply because of how awful it was. According to an analysis by Dalbar, the average investor earned 2.1% over the twenty year period ended Dec. 31, 2011. How did this compare to other asset classes? To make it very simple, the S&P 500 returned 7.8%, while the Barclays Capital US Aggregate Bond Index returned 6.5% over the same time period. A 50/50 blend of these two asset classes would have yielded a nominal annualized return of 7.2%. Wait, it gets even worse. After including inflation, the average investor got a negative…

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