Bernard Roshco

Bernard Roshco is a past editor of the Public Opinion Quarterly.

Recent Articles

Investor Illiteracy

The great bull market of the 1990s has generated euphoria in millions of inexperienced investors and laid the groundwork for privatization of Social Security. But extensive poll data suggest that investor expectations are grossly unrealistic.

I n the spring of 1998, market amateurs who had invested in a book titled The Beardstown Ladies' Common-Sense Investment Guide received some disillusioning news. The grandmotherly "Beardstown Ladies," the nom de publicity of the Beardstown Business and Professional Women's Investment Club, had inadvertently doctored their accounts. In their 1995 best-seller, subtitled How We Beat the Stock Market—and How You Can, Too , they had reported an average annual return during the 1984–1993 decade of 23.4 percent, besting the 14.9 percent of the Standard & Poor's 500 Index. But in 1998, an audit uncovered an embarrassment. The Beards town lady in charge of keeping the club's accounts had been adding monthly dues—$25 per member, monthly—into the ostensible profits. Subtracting the dues lowered the return for their first decade's efforts to 9.1 percent. This return, like that of most investors, trailed the S&P 500 average. After 1993, the Ladies' returns rose with...