Inputs
Investment
%
Behavior
Teaching Scenarios
Market Return vs. Average Investor Return
$100,000 over 30 years · 10.3% market · 3.5 pt gap
Your Behavior Gap Costs
$0
over 30 years — money left on the table by emotion
🎯
Disciplined Investor
Full market return — stays the course
$0
at 10.3%/yr
😰
Behavior-Gap Investor
Market return minus the gap
$0
at 6.8%/yr
The Five Common Behavior Errors
1. Recency Bias
Believing the recent past predicts the future — chasing whatever just went up.
2. Loss Aversion
The pain of losing $1 feels 2× stronger than the joy of gaining $1 — drives selling at lows.
3. Herd Mentality
Doing what everyone else is doing — buying tops in euphoria, selling bottoms in panic.
4. Anchoring
Fixating on an irrelevant reference point — "I'll sell when it gets back to what I paid."
5. Overconfidence
Believing you can outsmart the market through timing, stock picking, or "knowing when to get out." Statistically, almost no one can.
— Carl Richards' Famous Napkin —
What investors SHOULD do vs. what they ACTUALLY do
The Conversation:
The biggest threat to your retirement isn't the market — it's you. The S&P 500 averaged 10%+ over the last 30 years, but the average equity-fund investor captured only 6.8%. That 3.5-point gap, compounded over a lifetime, is the difference between a comfortable retirement and running out of money. The job of your advisor is to keep you from being the average investor. That's the alpha most people never see on a statement, but it's the alpha that matters most.