![\"\"](\"https:\/\/www.innov8fs.co.za\/blog\/wp-content\/uploads\/2024\/05\/Invest-768x432-1.jpg\")
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Investors continue to display self-destructive behaviours by trying to time the market, leading to significant losses.<\/p>\n
This is according to\u00a0NinetyOne<\/strong>\u00a0sales manager Paul Hutchinson, who said that after the Covid-19 pandemic, we have been in a period of accelerating change.<\/p>\n The world has seen the fastest interest rate hiking cycle in decades, regional conflicts with the real fear of escalation, and increasingly concentrated financial markets driven by the \u2018Magnificent 7\u2019, deglobalisation, ChatGPT, and Bitcoin.<\/p>\n South Africans have had to contend with continued load-shedding, deteriorating infrastructure, and the possibility that the ANC will lose its absolute majority at the 29 May elections.<\/p>\n \u201cBut in a sea of change, the one constant is investors continuing to act contrary to their best interests,\u201d he said.<\/p>\n DALBAR, a financial services market research firm, has provided evidence of this self-destructive investor behaviour.<\/p>\n DALBAR recently released the results of their 30th annual Quantitative Analysis of Investor Behaviour (QAIB) study to the end of 2023.<\/p>\n This study measures the effects of investor decisions to buy, sell and switch into and out of mutual funds (unit trusts) over short- and long-term time frames.<\/p>\n \u201cUnfortunately, the results of the QAIB study do not change. Due to their behaviour, investors earn less \u2013 in many cases, much less \u2013 than mutual fund performance reports suggest,\u201d Hutchinson said.<\/p>\n In 2023, the US equity market was up 26.3%, whereas the average equity investor realised only 20.8%. This means that their behaviour cost them a significant 5.5% in returns.<\/p>\n This was also the third-largest average investor gap in the last 10 years.<\/p>\n \u201cInterestingly, the two largest average investor gaps both occurred in strongly positive equity markets \u2013 on average, investors are therefore not benefiting from the full equity market upside,\u201d he said.<\/p>\n \u201cOver longer time periods, the average investor gap, while still significant, is lower, approximately 3.6% per annum over 5 and 10 years.\u201d<\/p>\n However, Hutchinson said this investor behaviour cost is not unique to equity investors. It is also evident across fixed-income and bond investors.<\/p>\n In these markets, the average bond investor gap was 2.6%, even though the bond market only returned 5.5% in 2023. The average multi-asset investor realised a return of 9.6%.<\/p>\n \u201cNo doubt, South African investors behave the same way,\u201d he said.<\/p>\n Investors continue to display self-destructive behaviours by trying to time the market, leading to significant losses. This is according to\u00a0NinetyOne\u00a0sales manager Paul Hutchinson, who said…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1744","post","type-post","status-publish","format-standard","hentry","category-innov8ions"],"_links":{"self":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/1744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/comments?post=1744"}],"version-history":[{"count":1,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/1744\/revisions"}],"predecessor-version":[{"id":1747,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/1744\/revisions\/1747"}],"wp:attachment":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/media?parent=1744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/categories?post=1744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/tags?post=1744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Credit: Bianke Neethling<\/h6>\n","protected":false},"excerpt":{"rendered":"