“I’m going to submit to you that in the 21st century, the most important asset that we have to protect as individuals and as part of our nation is the control of our identity, who we are, how we identify ourselves, whether other people are permitted to masquerade and pretend to be us, and thereby damage our livelihood, damage our assets, damage our reputation, damage our standing in our community.”

— Michael Chertoff, homeland security secretary, speaking at the University of Southern California National Center for Risk and Economic Analysis of Terrorism Events

When Jennifer Garst of Ames, Iowa, sat down to a casual Sunday brunch, she focused all her attention on catching up with her friend. The last thought on her mind was the possibility that a professional thief would nab her purse from where it hung on the back of her chair, steal her ID, and create a credit nightmare that would haunt her well into the future.

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To generate successful stock market returns, investors have to shut off their emotions. Doing so, however, may be more difficult than it sounds because humans are wired with emotions to ensure our survival. Personal financial specialist Gregory M. Desmond reveals five steps to get you on the right track.

The statistics speak for themselves. During the last 20 years, the S&P 500 delivered an average annual return of 11.81 percent a year, according to an annual study by Dalbar Inc. However, the average equity fund investor received only 4.48 percent annually, underperforming the S&P 500 by more than 7 percent and outpacing inflation by just 1.44 percent.

Dalbar’s study, Quantitative Analysis of Investor Behavior, measures the effects of investor decisions to buy, sell, and switch into and out of mutual funds. A key finding from the first study in 1994 is still true today: Investment return is far more dependent on investor behavior than on fund performance.

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