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2.9%
Source: Thomson Financial, Lipper and Bloomberg. Chart represents when the annualized market returns were less than 5%. Periods where there is not a subsequent
10 year period are not shown. The market is represented by the Dow Jones Industrial Average for the period from 1928 through 1957 and by the S&P 500 Index for
the period from 1958 through 2012. Investments cannot be made directly in an index. The performance shown is not indicative of any particular Davis investment.
Past performance is not a guarantee of future results.
There is no guarantee that the average stock fund will continue to outperform the average stock fund investor in the future. Equity markets are volatile and
average stock funds and/or average stock fund investors may lose money.
Avoid Self-Destructive Investor Behavior
Source: Quantitative Analysis of Investor Behavior by Dalbar, Inc. (March 2013) and Lipper. Dalbar computed the average stock fund investor return by using industry
cash ow reports from the Investment Company Institute. The average stock fund return gures represent the average return for all funds listed in Lippers U.S.
Diversied Equity fund classication model. Dalbar also measured the behavior of an asset allocation investor that uses a mix of equity and xed income investments.
The annualized return for this investor type was 2.3% over the time frame measured. All Dalbar returns were computed using the S&P 500 Index. Returns assume
reinvestment of dividends and capital gain distributions. The fact that buy and hold has been a successful strategy in the past does not guarantee that it will continue
to be successful in the future. The performance shown is not indicative of any particular Davis investment. Past performance is not a guarantee of future results.
Average Stock Fund Return vs. Average Stock Fund Investor Return
0%
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4%
6%
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8%
993202
Averuge Stocl lund Peturn
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8.6%
Averuge Stocl lund nvestor Peturn
4.3%
Investor Behavior Penalty
A study by Dalbar underscores the
importance of controlling emotions
and avoiding self-destructive investor
behavior. From 1993 to 2012, the average
stock fund returned 8.6% annually while
the average stock fund investor earned
only 4.3%. We call the gap between these
results the investor behavior penalty.
Why have investors historically
sacriced half their potential return?
Driven by emotions like fear and greed,
they succumbed to negative behavior
such as: