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Do DIY investors underperform?

Hands up those of you who bought growth stocks in the recent selloff.

OK, my hand’s up too.

I know this is a blog about index investing, but let’s be honest – we all love a good punt.

Netflix at 75% off its highs was just too much for me. I did absolutely zero research. I don’t even know if Netflix makes a profit these days.

I did the classic thing of anchoring to all-time-highs as if that was some sort of “fair value”, and then at 75% off I was getting a huge bargain. I knew I was making every behavioural mistake under the sun (alongside having done no research)… and bought it anyway.

Was it a good decision? Absolutely not. Even if the stock rockets from here, it’s not because of my great decision-making. It’s just me getting lucky.

The point is that even the most zealous index investors like to dabble in active stock and fund picking now and again.

In my defence, I’m sensible with my active positions. I have strict limits on position sizing – both at the individual stock/fund level and for the overall allocation to YOLO stocks. I also have rules on rebalancing, asset location, and sell discipline.

And I’m hoping these improve the performance of my YOLO portfolio compared to the average DIY investor. I’m actually willing to bet most DIY investors have scarily few rules in place governing how they construct their portfolios.

For those who have been paying attention, you will have seen the last few posts have been all about financial advisers – when you need them, whether they generate alpha, and how to choose them

And now I turn that focus on myself – as a DIY investor.

This post is all about examining the performance of DIY investors.

I’ve pulled together the relevant evidence I’ve accumulated over the last few years to help answer the question of whether DIY investors have a history of underperforming the market. I had a feeling the answer would be a resounding “Yes”, as that’s the conventional wisdom – plus it was consistent with a whole lot of anecdotal data.

Nonetheless, it’s always good to see whether the evidence confirms your hunches, so here we are.  

I’ve split this into two sections – the first goes through the evidence which supports the idea of DIY investors underperforming, the second examines the evidence against.

Contents

 

YES – DIY investors DO underperform

  • DALBAR’s ‘Quantitative Analysis of Investor Behavior’
  • Morningstar’s ‘Mind the Gap’
  • 10 academic studies

NO – DIY investors DON’T underperform

  • ‘Cash panickers: Coronavirus market volatility’ by Vanguard
  • ‘How America Invests [2020 edition]’ by Vanguard
  • ‘How America Saves [2022 edition]’ by Vanguard

Conclusion

YES – DIY investors DO underperform

 

DALBAR’s ‘Quantitative Analysis of Investor Behavior’

This is by far the most cited evidence of DIY investors underperforming.

It pops up all over the place, but is most commonly reproduced from JP Morgan’s Guide to the Markets. It’s the orange ‘Average Investor’ bar in the graph below – showing how much worse the average investor performs when compared to pretty much anything else:  

DALBAR

Unfortunately, the DALBAR study which this number is drawn from might be relying on dodgy maths.

In a now-infamous Advisor Perspectives article, retirement rock-star Wade Pfau meticulously dissects how DALBAR calculate their performance numbers – and why they’re wrong.

Here’s a brief summary of Pfau’s arguments:

  • DALBAR’s method for calculating average investor returns unfairly understates these returns.
  • The point is that the market index is based on time-weighted returns (assuming the investment of a lump-sum amount at the start of the period), while investors with ongoing savings and distribution needs will experience a different money-weighted return. With ongoing contributions to investments over time, an investor will underperform the market index if returns tend to be relatively higher in the early part of the investment period when less is invested, and lower in the latter part of the investment period when more funds are invested.
  • The DALBAR methodology ignores dollar-cost averaging component of these systematic investments and instead assumes that the entire $10,000 was invested at the beginning of 1997. This is because it uses the same methodology for calculating a time-weighted return, rather than using a proper money-weighted return.
  • Because these investors gradually enter the markets, they naturally lag behind a lump-sum investment into the S&P 500 for reasons completely unrelated to poor investor behavior. Calculating internal rates of return would correct for this. The dollar-cost averaging investor should be DALBAR’s benchmark for comparison, not the lump-sum investor.
  • Because the money is not invested for as long, on average, the accumulated wealth should be lower. But it doesn’t mean that an investor underperformed by making bad decisions. The investor did not have the resources to be invested yet. This dollar-cost averaging case is a better benchmark to determine real-world investor performance and whether investors mistime the market. DALBAR creates an unfair penalty by assuming these funds were all invested at the beginning of the time period.

If I’ve understood this correctly, what it seems like DALBAR are doing is figuring out the terminal wealth generated by a DCA strategy (over, say, 20 years), then calculating what the annualised time-weighted return would’ve been had they invested the full lump sum at the start of the period.

This seems pretty backwards.

The whole point of a DCA strategy (like investing monthly into a pension) is that you couldn’t possibly have invested everything at the start of the period – you didn’t have the cash!

There’s a nice chart from Pfau’s arcile, which shows the rolling annualized returns for 20-year periods ending between December 1945 and December 2016:

DALBAR 2

The lump-sum (time-weighted) returns reflect the annualized returns for the S&P 500 for these different periods. The dollar-cost averaging (money weighted) returns reflect the correct way to calculate the internal rate-of-return for ongoing systematic investments.

This allows us to see [the] point that sometimes money-weighted returns are ahead and sometimes they are behind. Though they have lagged behind time-weighted returns in the current century, there were various points in the past that these returns were ahead. It depends on the ordering of good and bad returns during each rolling historical period.

Finally, the yellow line reflects DALBAR’s incorrect way of calculating the returns from systematic investing. These returns lag behind dramatically for much of the historical period. But this reflects bad calculations and is completely unrelated to bad investor behaviour.

So the DALBAR study, despite being the most widely-spread evidence of DIY investor underperformance, isn’t particularly convincing.

But there are plenty of other sources which suggest DIY investors underperform the market.  

Morningstar’s Mind the Gap’ study

Each year Morningstar release their ‘Mind the Gap’ study, which compares the returns generated by funds to the returns of the investors in those funds.

If an investor managed to generate a higher return than the fund they invested in, that shows they were good at timing their purchases and sales – they bought low and sold high. If an investor underperformed the fund they invested in, that shows the opposite – they invested their cash when the fund was at a high point, and sold after it fell.

Here’s a selection of their findings:

  • Investors earned about 9.3% per year on the average dollar they invested in mutual funds and ETFs over the 10 years ended Dec. 31, 2021. This is about 1.7 percentage points less than the total returns their fund investments generated over the same period. This shortfall, or gap, stems from poorly timed purchases and sales of fund shares, which cost investors nearly one sixth the return they would have earned if they had simply bought and held.
  • Investors can improve their results by holding a small number of widely diversified funds, automating routine tasks like rebalancing, avoiding narrower or highly volatile funds, and embracing techniques that put investing on autopilot, such as dollar-cost averaging.
  • The 1.7-percentage-point gap between investor returns and total returns is more or less in line with the gaps found for the four previous rolling 10-year periods.
  • Investors in allocation funds, which combine stocks, bonds, and other asset classes, continued to show the smallest gap of any category group.
  • On the flip side, investors have struggled to use sector, nontraditional equity funds, and international equity funds successfully; these three category groups all experienced wider-than-average return gaps.
  • The more volatile a fund, the more trouble investors tended to have capturing its full return. Funds with higher levels of volatility generally experienced wider return gaps.
  • Investors in sector equity funds also fared poorly, as their dollar-weighted returns lagged the funds’ reported total returns by about 4 percentage points per year over the 10 years ended Dec. 31, 2020. Specialized funds were doubly disappointing. Not only did their total returns lag those of diversified U.S. equity funds by a wide margin to begin with, but investors also failed to capture the full benefit of those lower returns.

Here’s the main summary chart from their study:

Mind the gap 1

A few key takeaways in Morningstar’s own words:

  • Allocation funds, which combine stocks, bonds, and other asset classes, fared the best, with the narrowest return gap of negative 77 basis points. Two main reasons continue to explain this pattern:
    1. First, by virtue of their diversified approach, allocation funds tend to have more-stable performance and are easier to own than funds that are subject to more-dramatic performance swings.
    2. Second, these funds are often used as core holdings for employer-sponsored retirement plans, such as 401(k)s. Retirement plan participants typically invest a set percentage of each paycheck, leading to more-consistent cash flows into the underlying funds.
  • With alternatives funds, since total returns were relatively low to begin with, the average investor has actually lost money in dollar-weighted terms for the trailing 10-year period. That’s an incredibly disappointing outcome given that alternative funds are supposed to generate better results than traditional stock/bond portfolios. Annual asset flows for alternative funds have not only been volatile, but also prone to bad timing. For example, investors pulled out an estimated total of $16 billion in net flows from 2016 through 2020, thus missing the attractive returns in 2020.
  • Investors have fared the worst in sector equity funds, giving up close to 4 percentage points per year due to poorly timed fund flows. Sector funds are particularly prone to performance-chasing, with investors often piling into popular sectors after a strong showing and then bailing out when they fall out of favor… Thematic funds, a subset of this category that includes funds focusing on emerging trends such as robotic automation and working from home, have shown even wider return gaps. We estimate that annual dollar-weighted returns for thematic funds lagged reported total returns by about 11 percentage points over the trailing three-year period through April 2021.

…And this ties nicely into my conclusions from this article: ‘Against thematic funds’.

One other interesting chart from the paper was this one, which shows how the results would look in a hypothetical scenario in which an investor contributed equal monthly investments (dollar-cost averaging) to funds in each broad category group. By comparing investor returns with what they would have been assuming were steady monthly investments, we can zero in on the impact of cash flow timing on investor return:

Mind the gap 2

So following a systematic investment approach would have improved investors’ results in five of the eight major category groups. It also looks like the larger the behaviour gap is (sector equity and nontraditional), the larger the benefit of a systematic DCA approach.

Morningstar’s overall conclusions were that investors should:

  • Focus on holding a small number of widely diversified funds
  • Avoid narrow or highly volatile funds.
  • Automate routine tasks, such as setting asset-allocation targets and periodically rebalancing.
  • Embrace techniques that put investment decisions on autopilot, such as dollar-cost averaging.

10 Academic studies

As well as the DALBAR and Morningstar studies, there are plenty of other independent research papers which tackle the issue of whether DIY investors underperform.

I’ve included a selection below. It’s not an exhaustive list (I’m sure there are many more out there), these are just the ones I’ve come across in the time I’ve been collecting investing research.

I’ve provided links to all of them, and highlighted their key findings.

  1. The Behavior of Individual Investors by Brad M. Barber and Terrance Odean of University of California

“We provide an overview of research on the stock trading behavior of individual investors. This research documents that individual investors (1) underperform standard benchmarks (e.g., a low cost index fund), (2) sell winning investments while holding losing investments (the “disposition effect”), (3) are heavily influenced by limited attention and past return performance in their purchase decisions, (4) engage in naïve reinforcement learning by repeating past behaviors that coincided with pleasure while avoiding past behaviors that generated pain, and (5) tend to hold undiversified stock portfolios. These behaviors deleteriously affect the financial well being of individual investors.

After costs, the stock portfolio of the average individual investors earns a three-factor alpha of −31.1 bps per month (−3.7 pps annually). Individuals who trade more perform even worse. The quintile of investors who trade most actively averages an annual turnover of 258%; these active investors churn their portfolios more than twice per year! They earn monthly three-factor alphas of −86.4 bps (−10.4 pps annually) after costs.”

  1. What Are Stock Investors’ Actual Historical Returns? Evidence from Dollar-Weighted Returns by Ilia D. Dichev

“The empirical results indicate that aggregate dollar-weighted returns are systematically lower than buy-and hold returns. The annual difference is 1.3 percent for the NYSE/AMEX market over 1926-2002, 5.3 percent for Nasdaq over 1973-2002, and averages 1.5 percent for 19 major stock markets around the world over 1973-2004. Thus, this study provides comprehensive evidence that stock investors’ actual returns are considerably lower than those from passive holdings and from those documented in the existing literature on historical stock returns.”

  1. Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors by Brad M. Barber and Terrance Odean of University of California

“Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that traded most earned an annual return of 11.4 percent, while the market returned 17.9 percent. The average household earned an annual return of 16.4 percent, tilted its common stock investment toward high-beta, small, value stocks, and turned over 75 percent of its portfolio annually. Overconfidence can explain high trading levels and the resulting poor performance of individual investors. Our central message is that trading is hazardous to your wealth.”

  1. Higher Risk, Lower Returns: What Hedge Fund Investors Really Earn by Ilia Dichev and Gwen Yu

“We use dollar-weighted returns (a form of IRR) to assess the properties of actual investor returns on hedge funds and compare them to buy-and-hold fund returns. Our main finding is that annualized dollar-weighted returns are on the magnitude of 3% to 7% lower than corresponding buy-and-hold fund returns.”

NB: Even pension plans and other “sophisticated” investors earn less than the funds they buy!

  1. Mutual fund flows and investor returns: An empirical examination of fund investor timing ability by Geoffrey C. Friesen and Travis R. A. Sapp

“We examine the timing ability of mutual fund investors using cash flow data at the individual fund level. Over 1991–2004, equity fund investor timing decisions reduce fund investor average returns by 1.56% annually.”

  1. Timing Poorly: A Guide to Generating Poor Returns While Investing in Successful Strategies by Jason C. Hsu, Brett W. Myers, and Ryan Whitby

“By examining the difference between mutual funds’ reported buy-and-hold or time-weighted returns, and the average dollar-weighted returns or IRRs end investors earn, the authors quantify the consistently negative effect of value investors’ market-timing decisions: from 1991 to 2013, value mutual fund investors underperformed the funds they invested in by 131 basis points. Their analysis also reveals that investors in growth, large-cap, and small-cap funds are similarly prone to unproductive allocation timing. They also find that less sophisticated investors tend to make poorer timing decisions. Investors who hold funds with high expense ratios had larger return gaps than those who chose less costly funds, and investors in retail funds underperformed by a greater margin than those who qualified for institutional share-class funds.”

  1. What Investors Really Want by Meir Statman

“The trading records of thousands of investors at an American brokerage firm showed that the returns of the heaviest traders trailed those of index investors by more than 7 percentage points a year, while the lightest traders trailed by only 0.25 percentage point per year. That means the heavy traders were taking the risks of stocks while earning Treasury bill-like returns. 

The trading records of thousands of investors at a Swedish brokerage firm revealed that on average the losses of heavy traders amounted to 4 percent of their net worth each year.

Investors who switched mutual funds frequently trailed buy-and-hold mutual fund investors by about 1 percentage point if they switched between large-value funds, 3 percentage points if they switched between small growth funds, and 13 percentage points if they switched between technology funds.

Switching hedge fund investors did no better than switching mutual fund investors, underperforming buy-and-hold hedge fund investors by about 4 percentage points a year. And those that switched among the funds with the highest returns trailed by about 9 percentage points per year.”

  1. Attention Induced Trading and Returns: Evidence from Robinhood Users by Brad M. Barber, Xing Huang, Terrance Odean, and Christopher Schwarz

“Robinhood users are more subject to attention biases and more likely to chase stocks with extreme performance and volume than other retail investors;  Robinhood herding is influenced by information that is prominently displayed on the Robinhood app; Robinhood herding can be forecasted by attention measures, such as lagged absolute returns and lagged abnormal volume, previously shown to affect the buy-sell imbalances of retail investors; and Robinhood herding episodes are followed by abnormal negative returns.

Consistent with models of attention-induced trading, intense buying by Robinhood users forecast negative returns. Average 20-day abnormal returns are -4.7% for the top stocks purchased each day.”

  1. Cognitive Dissonance and Mutual Fund Investors by William N. Goetzmann and Nadav Peles

“We present evidence from questionnaire responses of mutual fund investors about recollections of past fund performance. We find that investor memories exhibit a positive bias, consistent with current psychological models. We find that the degree of bias is conditional upon previous investor choice, a phenomenon related to the well-known theory of cognitive dissonance.”

Alongside their conclusion that not only do investors not realise they’re underperforming, they underperform because of the following reasons:

  • Performance chasing
  • Not being diversified
  • Overtrading and paying too much in fees
  • Taking inappropriate levels of risk
  • Psychological biases – overconfidence, herding, the disposition effect, loss aversion, anchoring, mental accounting, etc
  • Fees
  • Inefficient use of tax sheltered accounts
  1. Why inexperienced investors do not learn: They do not know their past portfolio performance by Markus Glaser and Martin Weber

“Inexperienced investors are not able to give a reasonable self-assessment of their own past realized stock portfolio performance which impedes investors’ learning ability. Based on the answers of 215 online broker investors to an Internet questionnaire, we analyze whether investors are able to correctly estimate their own realized stock portfolio performance. We show that investors are hardly able to give a correct estimate of their own past realized stock portfolio performance and that experienced investors are better able to do so. In general, we can conclude that we find evidence that investor experience lessens the simple mathematical error of estimating portfolio returns, but seems not to influence their “behavioral” mistakes pertaining to how good (in absolute sense or relative to other investors) they are.”

These academic studies come down pretty hard on the side of DIY investors underperforming.

The extent of the underperformance varies depending on time horizon, turnover, geography, sampling methodology, etc – but the conclusions are clear. Every study found evidence of underperformance.

And that underperformance tended to range between 1% to 10% per year. In the case of the Robinhood study, it was over 4% in just 20 days. I’ll let you annualise that one.

The studies which then dived into the reasons for the underperformance found several culprits:

  • Performance chasing
  • Not being diversified
  • Overtrading and paying too much in fees
  • Taking inappropriate levels of risk
  • Psychological biases – overconfidence, herding, the disposition effect, loss aversion, anchoring, mental accounting, etc
  • Fees
  • Inefficient use of tax-sheltered accounts
  • Not being able to estimate their own past performance

 

NO – DIY investors DON’T underperform

 

Now we turn to the evidence supporting the other side of the coin.

Spoiler alert: there isn’t any.

There are, however, a few interesting papers by Vanguard which show how not all DIY investors are panicky overtraders YOLOing into meme stocks. And given that performance chasing and overtrading were two of the main culprits for DIY investors underperforming, Vanguard’s findings help support the view that not all DIY investors are the same, and it may actually be possible to invest your own portfolio responsibly and reduce the magnitude of underperformance.

  1. Cash panickers: Coronavirus market volatility by Vanguard

“This research note examines how a small subset of Vanguard U.S. investors who panicked, abandoning equities and moving the proceeds to cash, fared during this period of heightened volatility. Between February 19 and May 31, only 5% of self-directed defined contribution (DC) plan participants traded and 17% of retail self-directed households traded (see Figure 1).4 Less than 0.5% of Vanguard investors panicked and traded to an all-cash portfolio.”

Cash panickers 1

“The vast majority of the cash panickers would have been better off leaving their portfolios untouched; as markets continue to recover, nearly all of them will have realized actual returns lower than their personal pre-panic benchmark portfolio returns.”

  1. How America Invests [2020 edition] by Vanguard

I’ve included the 2020 edition rather than anything more up to date, as it includes some interesting data on the COVID crash, and how investors reacted to it:

“Overall, nearly half of the Vanguard affluent households traded through the first half of 2020 (Figure 55). This number is just 3 percentage points lower than the proportion of households trading throughout all of 2019, indicating a substantial uptick in trading activity. Moreover, by June 2020, the typical trading household had moved 10% of its assets, 2 percentage points more than what was observed for all of 2019.”

How America Invests 1

“The monthly trading trend showed a notable spike in March 2020, indicating that much of this activity happened during the initial market volatility (Figure 56). While trading incidence dropped somewhat in the following months, it remained higher than the average monthly incidence for the preceding five years.”

How America Invests 2

“Despite the increased trading incidence, most traders were not making large allocation shifts. The largest group of traders, 45%, were classified as rebalancers (Figure 58). Another 14% made equity shifts of 10 percentage points or more. Just 1% shifted to an extreme allocation, mostly trading completely out of equities.”

How America Invests 3

“The largest group of traders, the rebalancers, traded 4% of their portfolios over two days”

How America Invests 4

  1. How America Saves [2022 edition] by Vanguard

“Ninety-two percent of nonmanaged account participants did not make an exchange [in 2021], but of those who did, the most common action was rebalancing of their account (Figure 102).”

How America Saves 1

“Participants who are pure target-date fund investors not only benefit from continuous rebalancing but are also far less likely to trade when compared with all other investors. In 2021, only 3% of all pure target-date fund investors made an exchange, a rate nearly five times lower than all other investors (Figure 100).”

How America Saves 2

 

Conclusion

 

To answer the question of whether DIY investors underperform, the indisputable finding is “Yes”.

Underperformance is caused by all sorts of reasons, including:

  • Performance chasing
  • Not being diversified
  • Overtrading and paying too much in fees
  • Taking inappropriate levels of risk
  • Psychological biases (most notably overconfidence, herding, the disposition effect, loss aversion, anchoring, and mental accounting)
  • Fees
  • Inefficient use of tax-sheltered accounts
  • Not being able to estimate their own past performance

But not all DIY investors behave badly.

Evidence from Vanguard shows their clients are excellent at staying the course. Of course, this is sampling bias on steroids. Vanguard clients will have likely been drawn to investing with them due to their low-cost buy-and-hold philosophy. So their clients are already less likely to exhibit performance chasing tendencies than the typical investor – they’re basically a completely different species to the meme stock crowd.

But the evidence for and against whether DIY investors underperform really paint the same picture.

Those who trade often, chase performance, aren’t diversified, aren’t systematic, and who take inappropriate levels of risk are much, much more likely to shoot themselves in the foot and underperform.

Those who buy cheap, broadly diversified funds and who stick to a systematic strategy of DCAing and rebalancing are able to a) hold their nerve better during sharp market drawdowns, and b) capture a far higher share of market returns over the longer-term.

We know we can never expect to outperform the market over the long-run. In fact, us index investors are guaranteed to underperform. That’s actually the aim. To capture market returns less as low a fee as possible.

The stats in the ‘Active vs Passive’ section of this blog show how impossible consistent net-of-fee outperformance is.

So do DIY investors underperform? Yes, of course they do.

But there are huge variances in the magnitude of underperformance.

On the naughty end, you have the YOLOing Robinhooders who are diamond-handsing whichever speculative micro-cap is currently pumping. They underperform a lot.

On the other end, you have the DIY Vanguard Target Date Fund investors, who make periodic contributions into their systematically rebalanced broadly-diversified funds. They underperform by less. A LOT less.

Whether or not you’ll benefit from outsourcing your investments to a third party depends heavily on which end of that spectrum you fall on.

I want to believe I fall on the ‘Vanguard’ end of the spectrum… but I just know that’s not true. I like to dabble with picking stocks and funds as much as anyone else – despite writing a blog all about index investing. Buying Netflix after a 75% crash was just too tempting.

So the final couple of posts in this mini-series will bring together the material from the last few posts on the value of financial advice. One post will argue for outsourcing your investments, and the other for managing them yourself.

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Past performance does not guarantee future performance and the value of investments can fall as well as rise. The information on this site is provided for information only and does not constitute, and should not be construed as, investment advice or a recommendation to buy, sell, or otherwise transact in any investment including any products or services or an invitation, offer or solicitation to engage in any investment activity. Please refer to the full disclaimer on the disclaimer page.

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Serena
January 19, 2023 12:43 pm

Hi Occam,
I want to thank you because your blog is much more than a great inspiration for me, they have been enlightening.
I live in Edinburgh from the 2015, soon after arrived in Uk, I could not notice how many investments and tax free opportunities this country offers. I never been a big spender in general but never actually took in consideration the idea of investing my hard-earned money in something more riskier than a saving account at 1% yearly return. Never worried about inflation consequences, never heard of ISAs, shares, bonds, index funds, Buy to let, crowdfunding and diversification in general. If you put aside some newby YouTuber, in my country, information about personal finance are something almost unreachable by normal people not working in the sector.
My enlightenment started wit Rich Dad Poor Dad and, don’t make me wrong I understand that kiyosaki and Co. can be quite a cheesy version of the books you recommended in your “favourite of 2020” in fact has nothing to do with psychology of money which joined my library soon after reading your post.
But It actually made me hungry.
It showed me there is actually another way to live other than work your ass down till senility in a job you don’t like or at least does not make you crazy in love while you are ticking the boxes of the life list you supposed to do.
I discovered the FIRE and started to buy books and research online about financial independence, Google become one of my best friends which seems to have all the answers to my countless questions without prejudice and pretension. The English language open me up to a new world full of informations, make me feel I was living in a bubble of ignorance until that moment. Is in one of these researches I found your blog, until then I was covered in info I could not apply because most of them were from American prospective. A bit difficult when you are trying to invest your little money struggling to create a modest, diversified portfolio, keeping it with low fees and possibly tax free.
Not that now I finally out of my ignorance’s bubble, the countless grammatical mistakes in this message are probably a proof of that.
The more I read the more the things become tangled up and not so simple as they seems, in my head, so I limited myself to do my research and invest a lump sum in a stock and share isa with vanguard after reading your post “ best vanguard index tracker fund” and many others. Even after several books, researches and comparisons, vanguard seems offers the lowest fees with most decent performance at the time, leaving me the chance to choose the index fund.
At the moment I have an allocation of 90% shares and 10% bonds, obviously not performing the best during this time but it doesn’t really matter, going in the long run the downturns are only part of the marathon and eventually Black Friday deals.
In the flow of these new groundbreaking financial discoveries I took my first BuytoLet property 4 years ago, which brings me some extra income alongside with some sleepless nights in the first 2 years of my life of newby landlady.
I Noticed you not been posting from a while now and I wanted to express all my support whatever is the reason. Valid investing blogs bullshit-free from uk prospective like Yours are still difficult to find, and I looking forward to read your next post hopefully soon.
Thank you so much.
Kind Regards
Sere Na

Last edited 1 year ago by Serena
Jane
September 19, 2022 11:38 am

Hi Occam (hope one day I’ll be able to call you by a name 🙂 ),

First of all, thank you for all the work you put in this blog. Very thorough and most helpful!

I have a question about the post above: you mentioned the Vanguard investors in this debate about DIY investor performance, but aren’t all Vanguard investors *non* DIY investors anyway? Since you can only buy funds from Vanguard and not individual stocks, you can’t do stock picking? Thank you in advance! 🙂

peter leonard
August 17, 2022 5:54 pm

Can any body understand all that. no