There are so many strong instinctive biases. Recency bias is a huge one. Then all or nothing thinking seems to be very common - along with the inability to weigh short term versus long term trade-offs. The short-term issues/fears tend to way overshadow the long-term likely outcomes.
Maybe the company under performed the last few years.
Some above average high income earners learned with a single stock investment like Tesla you can earn more money in one month then a passive fund in one year. It does not work every month. It worked often.
That would be a dealbreaker for me. I probably still have too many moving parts in my portfolio but I monitor the IRR on each using a spreadsheet that can be updated in 5 minutes with downloads of current values. I've moved more into ETFs but have some individual stock picks that are doing well (e.g. ULTA, COST). I think Jim Cramer makes a very good point about ETFs getting dragged down when a few of the component companies look bad but there can be some good individual company picks. (Yeah, I know, I take him with a grain of salt and do extra research- his interviews with CEOs border on the obsequious.)
So... is Fisher going to start moving all its clients into ETFs? If they do, how will the justify their fees?
Market researcher Dalbar has measured the returns of "average investors" for a couple of decades plus, based on mutual fund flows. Long story short, average investors in both equity and bond funds earn about half the market return due to poor attempts at market timing, fear, greed, etc.
Very good points. Humans in some ways are just poorly wired for investing. Folks here who have saved enough to retire on their investments are either statistical outliers, are very disciplined, saved enough to outrun human factors, or some combination.
Yeah, I love those pitches (Fisher and others) that claim, "When you do better, we do better".
If they really meant it they'd charge a % of the change in the portfolio value after adjustments for deposits and withdrawals.
