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In praise of the (above) average investor (cont.)
[Download Printable White Paper]
The average shareholder has nearly 20 years of
investing experience, according to this survey. Most
described their investments as "moderately risky."
60% of investors are male, 64% married. Most say they
expect roughly a 10% return, over time.
Respondents gave themselves a "C+" in investing
knowledge, but only 10% of men and 27% of women
agreed with the statement "investing is too complicated
for me to understand."
Significantly, one out of five respondents said they
conduct virtually all their investment transactions
online, and analysts say this number is growing rapidly.
In other words, the typical American investor seems
reasonably well informed, realistic in terms of
expectations, and not afraid of investment risk.
But now for some cold water.
Other surveys indicate there is one area where
investment professionals might have a valid point with
their less than sanguine assessment of "average
investors." That's the question of passive vs. active
management.
Professionals know that 40% to 50% of all institutional
and pension funds i.e., the Big Money are invested
in indexes. But although benchmark studies
overwhelming show that passively-managed/index
portfolios historically out-perform "stock picking"
active-managed funds, some retail investors
unfortunately still are enamored of the "star"
managers and higher-fee funds. These are not
HP investors.
(For more on active vs. passive management, click on
our white papers in The Holland Portfolios library or the
Holland Investment Primer.)
So then
who is the average Holland Portfolio investor?
First, we don't believe anyone investing with
HP considers himself average, ordinary or typical.
Nor are you seeking average returns. Consistently
above average returns over time, relative to investment
risk, is what The Holland Portfolios are designed to deliver.
And presumably this is the reason you are investing
with us.
(cont.)
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