Behavioral Gap
Also called: investor return gap, behaviour gap, dalbar gap
The behavioural gap is the shortfall between the returns a fund reported and the returns its investors actually earned, caused by buying after gains and selling after losses. Studies consistently place it between one and two percentage points a year. It's the strongest available evidence that in investing, behaviour dominates selection — and the cheapest fix is automation rather than better analysis.
Want more than a definition? Learn it in Mind Over Markets →