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136 Don’t Make Me Say I Told You So

approximately $85,000 less than they could have if they had
invested in an S&P 500 index fund and simply left it alone. Over a

20-year retirement, this means that the average equity investor
would have approximately $4,250 less income per year than

with a simple “buy and hold” approach. That $4,250 translates
to approximately $350 a month less income than they would

have had by simply sticking with the S&P 500 index fund.

Fixed-Income Investor vs. Barclays Fixed-

Income Index

For the average fixed-income investor, the results were no
better. The following chart shows that the average fixed-income

investor’s returns over this 20-year period were approximately
one-seventh of the Barclays Capital U.S. Aggregate Index. The

individual investor doesn’t just have a problem investing in the
stock market; they have a problem managing both stocks and

bonds. Despite having all of the information at their fingertips,
the average investor has woeful returns when managing their

own money. These poor returns translate into a much smaller
retirement nest egg, which in turn leads to a lower income during

retirement. This lower income can result in a less enjoyable,
more stressful retirement.

Chapter 4: The Most Common Investor Mistakes