SYLVANIA, Ohio, July 31, 2015 /PRNewswire/ -- It's all too easy
to make the wrong moves when it comes to investing, but according
to SJS Investment Services, a Registered Investment Advisor and
creator of MarketPlus® Investing, avoiding three common
mistakes can improve investors' chances of having more favorable
outcomes.
With all the financial information available, it seems as if
anyone could invest on their own and keep pace with the market.
However, 30 years of data show individual investors' portfolio
performance trails overall market performance. The 2015
edition of the "Quantitative Analysis of Investor Behavior"
performed by DALBAR, a financial services research firm, showed in
2014 that the S&P 500 was up about 13.7%, while the average
do-it-yourself equity mutual fund investor earned an average 5.5%
return. Over the 30 years ending December
2014, the S&P 500 gained 11% annually; the
do-it-yourselfer earned less than 4%.
SJS Investment Services explains the earnings disparity using
roughly two decades' worth of listening to clients and their
investing woes. "People aren't all that different when it comes to
investing on their own. They are emotional," said Scott Savage, founder and CEO. "They buy when
the market is high, sell when it's low. Then they repeat until they
are out of money." This behavior is the result of three common
mistakes:
- Timing the Market
People think attempting to get in when the market is low and get
out when the market is high is the best way to improve performance.
"Not so," says Savage, who calls this a "fool's errand and a costly
decision."
- Stock Picking
People often try to roll the dice and
pick one, two, or a handful of stocks that they think are going to
outperform the market. SJS recommends designing a portfolio
diversified across and within asset classes as a way to minimize
risk and capture the market's upside potential.
- Chasing Performance
People often choose an investment based on past or current
performance with the assumption that it will continue. In the
study, "Luck vs. Skill in the Cross Section of Mutual Fund
Returns," published in the October
2010 issue of the Journal of Finance, authors
Eugene Fama and Kenneth French showed that active fund managers
cannot accurately speculate on where individual prices are going to
go and systematically beat the market.
MarketPlus Investing helps investors remove the emotion from
investing and maintain discipline. "It is about science, not the
hype of believing you can 'beat' the market," said Kevin Kelly, SJS Investment Services
president.
Savage admits the common sense process isn't very glamorous, and
that most of the investment world is doing the near opposite. Many
people believe that stock picking, market timing, and chasing
performance is how investing should be done. But at SJS Investment
Services, it's done through science and discipline, which is how
they and their clients prefer it.
Persons interested in learning more about MarketPlus Investing
can visit the company website at www.sjsinvest.com.
About SJS Investment Services
SJS Investment Services is an investment advisory firm that has
been advising people, families, organizations and communities,
managing their assets, and in general being there for them since
1995. The firm accomplishes this through its proprietary process
called MarketPlus® Investing and by putting people first
in all they do. SJS Investment Services works nationwide and serves
individual investors, institutional investors, corporations,
financial institutions, and public entities. The company is
headquartered in Sylvania, Ohio.
For more information, visit www.sjsinvest.com.
Video -
http://origin-qps.onstreammedia.com/origin/multivu_archive/PRNA/ENR/SJS-Investment-Services-Common-Mistakes-Investors-Make.mp4
SOURCE SJS Investment Services