142 BloombergBarclays Aggregate Bond Index Average Annual Total Return 2000 - 2019– 5.03% Assumption: $100,000 investment over 20 years, compounded annually. 1 : 2 : 3 : 4 : 5 : 6 : 7 : 8 : 9 : 10 : $105,030.00 $110,313.01 $115,861.75 $121,689.60 $127,810.59 $134,239.46 $140,991.70 $148,083.59 $155,532.19 $163,355.46 11 : 12 : 13 : 14 : 15 : 16 : 17 : 18 : 19 : 20 : $171,572.24 $180,202.32 $189,266.50 $198,786.61 $207,785.57 $216,287.49 $230,317.65 $241,902.62 $254,070.33 $266,850.06 Final Portfolio Balance: $266,580 Don’t Make Me Say I Told You So Average Fixed-Income Fund Investor Average Annual Total Return 2000 - 2019– .47% Assumption: $100,000 investment over 20 years, compounded annually. 1 : 2 : 3 : 4 : 5 : 6 : 7 : 8 : 9 : 10 : $100,470.00 $100,942.21 $101,416.64 $101,893.30 $102,372.19 $102,853.34 $103,336.75 $103,822.44 $104,310.40 $104,800.66 11 : 12 : 13 : 14 : 15 : 16 : 17 : 18 : 19 : 20 : $105,293.22 $105,788.10 $106,285.31 $106,784.85 $107,286.74 $107,790.98 $108,297.60 $108,806.60 $109,317.99 $109,831.79 Final Portfolio Balance: $109,831 The S&P 500 is an unmanaged index comprised of 500 widely held securities considered to be representative of the stock market in general. You cannot directly invest in the S&P 500 index. Hypothetical example is for illustrative purposes only and is not representative of any performance of any product and are not guarantees of future results. Future performance cannot be guaranteed, and investment results will fluctuate with market conditions. If we assume that this portfolio never increased in value again, the average fixed-income investor would have approximately $139,000 less than if they had invested in a bond index fund that tracked the Barclays index and simply leſt it alone. Over a 20-year retirement, this means that the fixed-income investor would have approximately $6,950 less income per year than they would have by buying and holding. That translates to approximately $580 a month less income compared with holding onto a bond index fund. Taken together, the average investor who invested $200,000 in a portfolio of 50% bonds and 50% stocks 20 years ago would have approximately $224,000 less in their retirement accounts than they might have with a steadier approach. Over a 20-year Chapter 4: Common Investor Mistakes – and How to Avoid Them
