'Behavior Gap' or 'Inspection Paradox'?

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'Behavior Gap' or 'Inspection Paradox'?

Post by JoMoney » Fri Apr 20, 2018 9:28 am

Something I'm pondering that maybe a Boglehead can answer as true/false:
There is a frequently cited situation where the average investor under-performs the average performance of a fund/investment, referred to as the "Behavior Gap".

Since the returns in a fund/investment across any specific time period looked at do not occur at regular intervals spread across the period measured, is it actually a certainty that the average transaction will be poorly timed within the measurement period as explained by the "Inspection Paradox" (from Renewal Theory )?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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