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529 Performance Risk
What if Investors do Much Worse Than the Averages?
What Does the Dalbar Study tell us About Your Chances for Investing Success?
The chart at right is a graphic depiction of the results of the Dalbar Study. Essentially, from 1992 through 2011, the S&P 500 Index returned 7.81% annually on average. Investors - those with advisors and those without - on the other hand, earned on average 3.49% over the same period. If those returns were achieved year-in and year-out, passive S&P 500 investors would have seen a hypothetical $100,000 turn into $449,968 while active, managed-money investors would have been left with less than half that, $198,595. This begs the question, "What are you hoping to achieve by paying advisors and fund managers?!"
If most of what you've heard about 529 Plans is inaccurate or exaggerated AND they hurt your chances for merit and need-
based aid AND they are actively managed, which means they'll almost always underperform the S&P 500, why do parents own them?
Why are parents paying for results they aren't getting?
The Dalbar Study measures the results of the stock market against the results of individual investors.
The S & P 500 index, from 1992 through 2011, returned 7.81% annually on average. The average mutual fund investor, on the other hand, earned only 3.49% annually.