The Behavior Gap Strikes Again!

How timely!  After writing about the Behavior Gap on September 17th, Investment News published an article today about how large cap investors missed out on some of the market rally by trying to time the market... again.

To recap, the behavior gap is the difference between the average mutual fund return and the average mutual fund investor return.  Due to market timing and emotion mutual fund investors on average do not beat the passive index. This means they would be better off just buying and holding the index.

"Investors in the biggest large-cap mutual funds have been their own worst enemies since the financial crisis."