Investors Are Missing Out on Nearly 16% of Investment Returns

In a recent study published by the investment research company Morningstar, they estimate that the average dollar invested in funds by individual investors over the 10 years ending December 31st, 2023 earned a 1.1% lower rate of return per year than the actual investments they were invested in. This resulted in individual investors out on nearly 16% of the investment's actual returns each year, even without consideration of any investment fees. Morningstar updates this data annually as part of their "Mind The Gap" study, and in this episode I break down why this is happening and what this means for investors. More specifically, I discuss: What investing insights does this research show us? The difference in investor return "gaps" per asset classes invested in. Investors miss out on 50% of taxable bond fund returns! Why are many individual investors earning lower average rates of return than their investments themselves? The difference in investor return "gaps" based on the volatility of a particular asset class. Resources: Access Show Notes and Sign Up for the Retired·ish Newsletter HERE Ask Cameron A Question!   Key moments are: 00:00 Difference between investment and investor returns. 05:07 Investor behaviors remain consistent over the years despite political and economic uncertainty. 06:37 Return gap varies widely depending on asset class. 12:55 Investors tend to receive about 50% of bond fund returns. 16:33 The more volatile the fund, the more likely investor's poorly time investment activity.