easy · Certified Financial Planner Psychology
When presenting the 'behavior gap' to the Okada family, the planner demonstrates that the 'investor return' was 7% while the 'fund return' was 9%. This 2% difference is primarily caused by:
- A failure of the manager to beat the benchmark
- The difference between arithmetic and geometric means
- Poorly timed client decisions to buy high or sell low
- High expense ratios and hidden trading commissions
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