Why should MFDs suggest SIPs to their clients?
Have you ever looked at the historical returns of a mutual fund and wondered why your own returns don’t match up? You are not alone. There is a well-documented phenomenon in personal finance known as the behavioural gap . This gap refers to the difference between the returns a fund or investment generates and the returns investors actually earn from it. The behavioural gap exists not because of the market or the economy but due to how investors behave. Emotions, market noise, and reactive decisions often prevent investors from capturing the full benefits of their investments. In this article, we explore what causes the behavioural gap, how it impacts long-term wealth, and what investors can do to bridge it. What Is the Behavioural Gap? The behavioural gap is the difference between an investment's performance and the actual returns an investor earns from it. This happens because most investors buy and sell at the wrong times. For example, they may invest in a mutual fund after ...