Mind The Gap: Trust Your Gut? Use Your Brain! I recently watched a webinar by Morningstar titled "Mind The Gap." This presentation focused on the gap between mutual fund returns and investor returns. One would think that these two metrics would be the same - over both short and long time horizons. The sad truth is that even with all the self help available to retail investors, there is still the common urge to chase good returns by buying previous winners (after their big runup) and to sell recent losers (just before their rebound). This phenomenon is the main focus for a relatively new field of research named behavioural economics. Trust Your Gut? This is a great mantra for a romantic relationship or dark alley scenario. It is, however, a suboptimal (translation: lousy) strategy for any decision that involves a dollar sign and a date on a periodic statement. The reason is literally hard-wired into our anatomy. When we think of our autonomic nervous system, there are three