Investing term
What is Behaviour gap?
The gap between the returns a fund delivers and the returns its actual investors earn.
The behaviour gap is the shortfall between the returns a fund delivers and the returns its actual investors pocket, caused by buying high and selling low at the worst moments. It's the same idea as the behavior gap, and it's a reminder that an investor's own decisions — not the fund — are often the biggest drag on results.
For example
Two people own the same fund; the one who calmly held earns its full 8%, while the one who panic-sold in every dip earns far less — that difference is the behaviour gap.
Behaviour gap is taught hands-on in Stage 11 — Automate, Compound & Start Early.
See the lesson →