DAC Insights: Human Emotion & Investing…The Enemy Within

It is said that predictability is one of the foundations of all human behavior.  Most of us in some way strive for consistency and predictable routines which causes us to react at times irrationally and or negatively to uncertainty.  Thus, the volatility of the financial markets and human behavior are inevitably at odds both with fear and greed.

There have been many studies over the years trying to determine just how successful are individual investors.  One of the most widely quoted research firms in this area, Dalbar, concluded a 20-year study which analyzed investors’ market timing successes and failures through their net purchases and sales of mutual fund shares.  They call this the Guess Right Ratio…

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