About QAIB

Since 1994, Dalbar's Quantitative Analysis of Investor Behavior (QAIB) has been measuring the effects of investor decisions to buy, sell and switch into and out of mutual funds over both short and long-term time frames. The results consistently show that the average investor earns less – in many cases, much less – than mutual fund performance reports would suggest.

The goal of QAIB is to continue to improve the performance of independent investors on the one hand and of professional financial advisors on the other hand by incorporating the factors that influence behaviors that determines the outcome of investment or savings strategies. QAIB offers guidance on how and where investor behaviors can be improved.

QAIB 2012 examines real investor returns in equity, fixed income and asset allocation funds. The analysis covers the 20-year period ending December 31, 2011, encompassing both the drop at the turn of the millennium and the crash of 2008, plus the recovery periods of 2009 and 2010. This year's report discusses the market volatility of 2011.

The report looks at the effects volatility had on investor returns in 2011 by looking at the psychological factors that drive their decisions.

While 2011 in particular, provides a startling contrast between average investor returns and reported Mutual Fund performance, the central findings have remained consistent: Investment results are more dependent on investor behavior than on fund performance. Mutual fund investors who hold on to their investments are more successful than those who t ime the market.

To preview the table of contents of the full study please click here.

Report Highlights:

• Do Fiduciaries Produce Better Returns - A look at the legislative and regulatory activity aimed to provide a higher quality of investment advice.
• Investor Irrationality on Display - A look at retention rates and investors’ ability to correctly time the market.
• Investor Returns - The bottom line: how did investor returns compare to the broad market indices?
• Risk Aversion and Inflation - A look at how extreme risk aversion can erode wealth.
• QAIB Through the Years - This section compares the average equity investor returns and buy-and-hold returns since 1997.
• Systematic Investing - This section shows the results for the average investor in equity, fixed income or asset allocation mutual funds compared with the hypothetical process of systematic investing.