Hesitation can cost you dearly. The average investor foregoes 4–5% in returns each year by leaving their wealth in cash.

Hesitation can cost you dearly

The average investor foregoes 4–5% in returns* each year by leaving their wealth in cash rather than investing in a diversified portfolio.

Failing to invest at all is the first way in which we exchange long-term performance for short-term emotional comfort. Here, the comfort factor is very simple – we cannot lose if we don’t get involved. But the potential cost – on average 4–5% in lost returns each year – is very high

Often those prone to reluctance only decide to invest when there is a sustained market boom. But by going in at the top of the market, they may experience the knock-on effects of buying high: a reduction in returns and an increase in anxiety and stress.

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*Source:  Barclays Wealth & Investment Management, White Paper - March 2013, "Overcoming the Cost of Being Human'.

http://www.investmentphilosophy.com/fpa/