Schroders Investment Management
Over confident investors and the help they need
Investors thinking they know more than they do about investing could cause problems when it comes to their future financial planning.
Investors could be missing out on billions of Euros in investment returns by over estimating their own ability to understand their investments.
Schroders Global Investor Study 2016 found that only 13% of investors globally would admit to having a less than average understanding of investments. It found investors in Germany, the US and the UK were among the countries most prone to feeling this way.
Of the investors polled globally by Schroders, 51% described themselves as having more understanding than the average investor – suggesting over-confidence.
This might be costly. A previous study found that investors’ belief in their own investment ability had cost them around $300 billion dollars in investment returns over the last 20 years. This is explained further below.
A $300 billion black hole is a large one to fill, particularly when investors are building wealth and planning for retirement in...