Officials remained firmly committed to a "patient" policy stance at their meeting earlier this month.The Fedread more
Stocks that would benefit from a federal infrastructure spending program fell after President Trump ended a meeting on infrastructure spending with Democratic leaders.Market Insiderread more
The president abruptly walked out of a meeting Wednesday, saying he would not negotiate with Democrats while they continue to investigate him.Politicsread more
Despite the president's claim that "you can't investigate and legislate simultaneously," certain must-pass pieces of legislation, including a debt ceiling hike, will...Politicsread more
Americans in certain areas of the country have significantly higher average credit scores than others. Experian's annual State of Credit report shows the average score in each...Spendread more
Amazon shareholders demanded the company to take action on a number of different issues during its annual shareholder meeting on Wednesday.Technologyread more
Talk about 5G is everywhere right now, from the trade-war with China to the ban on Huawei. Here's what 5G is and why it matters.Technologyread more
Controversial lawyer Michael Avenatti was indicted on charges of trying to extort athletic shoe giant Nike out of tens of millions of dollars by threatening to go public with...Politicsread more
More voters in five key industrial states disapprove than approve of Trump's handling of trade — 56% to 41%, according to a report.Politicsread more
Ireland's privacy watchdog, which leads supervision of Google in the EU, launched an inquiry into the firm's online advertising practices.Technologyread more
These are the stocks posting the largest moves midday.Market Insiderread more
Bad market timing and poor stock picking kept most investors from fully reaping the gains of the bull market last year.
"The average investor held too much in cash, was too concentrated in stocks that didn't perform well and avoided financial stocks that rallied last year," said Hart Lambur, co-founder and CEO of Openfolio, a social network with more than 70,000 members who share their investment portfolios.
The average investor on Openfolio had a gain of roughly 5 percent in 2016. That lagged the nearly 12 percent total return of the S&P 500, which includes dividends, by more than 7 percentage points last year. (See chart below.)
Many Openfolio users liked stocks of tech titans, such as Amazon, Apple and Facebook, that generated double-digit gains last year. However, stocks of household names widely held by Openfolio investors, like FitBit, GoPro and Under Armour, hurt their portfolios more in 2016.
Part of the lag can be attributed to investors having a diversified portfolio. That is a good thing because it smooths volatility and can improve returns over long periods.
Yet when you consider that a balanced portfolio of 60 percent U.S. stocks and 40 percent U.S. bonds would have generated roughly 7 percent last year, Openfolio investors still fall short by 2 percentage points.
Mutual fund investors didn't fare that well last year either, based on preliminary data from investment research firm Morningstar. (See table below.)
Morningstar estimates the average investor returns by comparing fund returns to how much money flowed in and out of those funds.
"After a bear market, investors tend to buy bond funds. In a great stock market, they tend to buy more stock funds," said Russel Kinnel, Morningstar's head of manager research. "Investors chase fund performance and headlines."
It's not that investors always underperform their funds.
The second-longest bull market in history, which began in March 2009, has helped the average investor outperform in U.S. fund categories over three- and five-year periods. Target-date funds also tend to have better investor returns than average returns over the past 10 years, according to Morningstar.
You can easily avoid the mistakes that tripped up the average investor last year. "If you have a financial plan, you are a little more insulated from the fear and greed," Kinnel said.