Commentary & Insight

The end of performance chasing

Managing money to help meet your goals

Real returns lag benchmark performance

Individual investor net returns have lagged benchmark performance by a factor of about 3-to-1.¹

Studies of investor behavior consistently show that individual investors chase performance. They invest in a top performer and expect the outperformance will continue. Typically, however, it doesn't. Investors chase performance instead of looking to an investment strategy that enables them to meet their long-term financial goals.

Fortunately, performance chasing is being overtaken by a new way of thinking. Financial advisors and individual investors are beginning to move toward investment solutions designed to meet specific needs and goals. This is clearly evidenced by the growing popularity of goal-based investment solutions that include embedded investment advice.

In this whitepaper, learn more about:

• Factors influencing the shift away from performance chasing and toward goal-based investing
• Principles of a goal-based investing approach
• Innovative investment products designed to support a goal-based approach

• Access this PDF to read more

1 Source: Dalbar, Inc., 2005 Quantitative Analysis of Investor Behavior. Based on total returns for the 20 years ended December 31, 2004. Benchmark returns for equity and asset allocation represented by total returns of the S&P 500. Benchmark returns for fixed income represented by annual total returns of the Lehman Aggregate Bond Index (15-year returns; 20-year return NA). Investor returns calculated as the change in assets, after excluding sales, redemptions and exchanges, taking into consideration realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses and any other costs. It is not possible to invest directly in an index.