I attended a really interesting presentation by Carl Richards this week on the “behaviour gap” (www.behaviorgap.com). The essence of this phenomenon is that there is a (huge) difference between the return of the average equity fund over time and the return experienced by the investor. This difference is what is now called the “behaviour gap” and it results from investors reacting emotionally to their investments.
Carl has managed to capture much of the common sense around investing in very simple sketches (take a look at his site). While I was listening to him speak, I was reminded again how much of investing (like life) is common sense (although it does not seem to be so common). So in recognition of this and with thanks to him, I have made my own simple sketch about investing called “Success!”
Hope you like it…