Image Credit: Alex Nabaum

Bit by bit, the myth of the “dumb money” is dying.

For decades, Wall Street has derided individual investors as ill-informed, fickle and hapless. Instead of buying and holding, or buying low and selling high, the “dumb money” blindly chases performance, buying high and selling low. The perennial message from Wall Street: The only way the dumb money can get smart is by taking our advice—at a reasonable fee, of course.

That was always nonsense, but new evidence of its foolishness is piling up fast. A study of clients of Vanguard Group, the giant asset manager, is the latest look at how individual investors make decisions. It shows them, overall, to be patient and prudent. It also offers a hint as to how investors and their financial advisers can get a little smarter still….

---

Further reading