Personal finance tips: How to avoid investment underperformance, and more

Three pieces of financial advice — from the financial risks of aging to how to be smart about insurance

Nest Eggs
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Why investors underperform

When it comes to poor returns, investors often have only themselves to blame, said Jason Zweig at The Wall Street Journal. The average investor in all U.S. stock funds earned 3.7 percent annually over the past 30 years, but over that same period, the S&P 500 stock index returned 11.1 percent annually. Why did individuals fare so poorly compared with the overall market? "Fear and greed." Investors tend to get nervous when stock prices dip and overeager when they surge, increasing the likelihood that they sell low and buy high, and driving their average return below that of the fund in which they're invested. The best course? Stay the course. Think of a mutual fund as a train that runs from Chicago to San Francisco. Some people who boarded in Iowa might get off in Nevada, but only those who travel the full distance will get the full benefit.

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