Welcome back! Join me on this journey to improving our financial IQ and sharing what we know. Updates at RSS feed or Email. And spread the word please Thank You!
McKinsey research shows that equity analysts have been overoptimistic for the past quarter century.
On average, their earnings-growth estimates—ranging from 10 to 12 percent annually, compared with actual growth of 6 percent—were almost 100 percent too high.
Only in years of strong growth, such as 2003 to 2006, when actual earnings caught up with earlier predictions, do these forecasts hit the mark.
You can read the entire Mckinsey report here. You need to register.
And here’s another study that I wrote about sometime back:
Further, DALBAR’s update of its Quantitative Analysis of Investor Behavior (QAIB) study found that for the 20-year period, equity fund investors averaged 3.17% compared to 8.20% for buy-and-hold stock investors (S&P 500)
How about taking a look at the 88% solution!
About Ranjan
He edits Personal Finance Online Resources, delivers Financial Awareness Workshops and has built a desktop RupeeManager.
Email: ranjan@ranjanvarma.com or Call on +919867755615
