tag:blogger.com,1999:blog-5465015914589377788.post7919905051133973176..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: DALBAR’s Measure of Investor Underperformance is WrongMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5465015914589377788.post-48063790542049452812020-11-07T15:15:24.049-05:002020-11-07T15:15:24.049-05:00We crawlers complain about the Seeking Alpha artic...We crawlers complain about the Seeking Alpha article link, but it still works:<br /><br />https://seekingalpha.com/article/4109442-dalbar-2017-investors-suck-investing-and-tips-advisorsMichael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-83737683038846090672018-01-03T11:05:37.426-05:002018-01-03T11:05:37.426-05:00@Greg: To be fair to the other critics of Dalbar&#...@Greg: To be fair to the other critics of Dalbar's methodology, I'm not sure how long ago Dalbar explained the details of their methodology, and these other critics may not have expected such a basic mistake.<br /><br />For the case of all investors collectively, we do have the fine-grained cash flow information. It would be trivial for Dalbar to take data they already have and compute the IRR.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-37579296262559268312018-01-03T10:28:19.992-05:002018-01-03T10:28:19.992-05:00This is such a basic flaw that it's hard to be...This is such a basic flaw that it's hard to believe knowledgable people take Dalbar seriously and resort to complicated or vague criticisms (sequence of returns, where is the missing money). You nailed it, it's kind of obvious that if you had more money to invest earlier you'll end up with a lot more money in the long run of a rising market. <br /><br />I think it's probably true that investors earn less than the could due to jumping in and out of hot/cold funds, but you'd really need more fine grained cash flow information to quantify the effect. Gregnoreply@blogger.com