There are certain cognitive errors that human beings make with great regularity which cause them to make sub optimal decisions when it comes to investing. Individual humans learn, but collectively human beings tend to repeat those cognitive errors.
Some common ones are:
Together, these biases cause investors to either under- or over-react to information, causing pricing inefficiencies and irrational behavior.
This creates a “behavior gap” between what investors can achieve and what they actually achieve.
We will bridge that gap with our disciplined process driven decision making and execution.
Even if investors pick the right manager they under perform or underperform the market as they enter and exit at the wrong time.
The above charts show “behavior gap” between what investors can achieve and what they actually achieve.
A disciplined process and execution will ensure that we bridge this “behavior gap”