In this week's podcast, we dive into why so many investors underperform the very funds they invest in. Drawing on Morningstar's Mind the Gap 2025 research, we explore how "magpie behaviour" — chasing shiny new investments, panicking in downturns, or tinkering too much — quietly erodes long-term wealth.

The evidence is clear: bad behaviour can cost over 1% per year, compounding into massive losses over time. But the gap isn't inevitable. This episode shares practical steps to help you capture more of the returns you deserve — and avoid being the magpie.

Key Points

• Morningstar "Mind the Gap 2025" shows investors lose ~1.2% per year due to poor timing and bad behaviour.

• Chasing shiny investments (like tech, AI, or thematic funds) often backfires.

• ETFs and bond funds show wider performance gaps due to frequent trading.

• Behaviour matters more than markets or fees — discipline drives long-term returns.

• Five ways to close the gap:

  • Automate contributions, rebalancing, and withdrawals

  • Work with an advisor to stay disciplined

  • Focus on low-cost, globally diversified core holdings

  • Keep "fun money" small if dabbling in niche funds

  • Build a margin of safety into your financial plan

Disclaimer