Question of the Day: What Makes Teachers The Best Investors?
From Yahoo Finance:
Teachers are far more patient than other investors. They only traded 6.1 times per year, compared to the average investor, who traded 9.1 times. This should come as no surprise. Plenty of research has shown that passive investing trumps active investing on a pretty consistent basis.
Teachers aren’t sold on individual stocks. Openfolio found that teachers are much more likely than the average investor to invest in mutual funds than in single stocks — a more diversified approach. About 52% of teachers invested in mutual funds, holding the rest of their investments in individual stocks. The average investor held 46% in mutual funds and 54% in individual stocks. While Openfolio does not reveal the exact brokers its investors use (for security purposes), they estimate that teachers invest 10-20% more through 401(k)s than through self-directed accounts (like a brokerage account with E*Trade) when compared to the average investor.
Check out NGPF’s lesson on Investing Basics
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.