Not long ago, BlackRock did a study on how various asset classes performed over the 20 years from the beginning of 1992 to the end of 2011, and the findings were rather shocking.
It turns out that the average investor underperformed every single asset class, from oil to gold to inflation, earning an average of just 2.1 percent annually compared to the 7.8 percent for stocks.
[The updated study shows the average investor is now up to 2.5%, ahead of inflation's 2.3%.]
Not such a good track record.
Why the underperformance, especially considering that most investors are buying the very asset classes that outperformed them, including stocks, bonds, oil, and gold?
That's where it gets interesting. According to a famous study by Fidelity Investments, it could very well come down to trading - or more precisely, not trading.
In the study, Fidelity conducted a review of its best-performing accounts - not its best-performing funds, but the actual performance of Fidelity account holders.
The finding? The best-performing accounts were dead. In other words, the best-performing accounts belonged to investors who didn't trade at all because they forgot they even had Fidelity accounts!
-- Bill Spetrino, The Dividend Machine, June 2015