Investors Who Held On Since 2008 Made Right Move

We thought this was worth sharing: “Investors Who Held On Since 2008 Made Right Move”.  This was published August, 19, 2011 on CNBC.  They report three key findings:

  1. Those that changed equity allocations to zero and stayed clear of stocks had an average balance increase of only 2%.
  2. Participants who exited after the crash and recently returned to stocks saw a balance increase of about 25%.
  3. Investors, who stuck with stocks following an assets allocation strategy, had an average account balance increase of 50%.

Another interesting figure compared the account balance of those who stopped contributing to their 401(k) (increase of 26%) verses those who continued their regular contributions throughout the crash (50% increase). We think the numbers speak for themselves and this is why our strategy for clients, which most closely resembles finding number three above, appears to be effective. We welcome thoughts and comments Robert M. Bilkie Jr., CFA