09 Sep 2016 First Eagle Investment Management: Helping Investors Stay Invested ( Portfolio )

For more than two decades now, well-known research by Dalbar has reconfirmed that the average investor in equity mutual funds has generally realized much smaller gains than the portfolio itself delivered. Average investors have often done themselves harm—typically by selling equity mutual funds into bear markets, when prices are depressed, and later buying into bull markets at high prices. Fear of loss is a very powerful force. Investors’ risk aversion is roughly twice as powerful as their desire for investment gain.