Most investors believe their biggest enemy lives out there —in the market, the Fed, inflation prints, earnings misses, geopolitical headlines, or the mysterious whims of traders who seem to know something you don’t. That belief is comforting. It implies that underperformance is caused by forces beyond your control. If the market would just behave rationally, if central banks would stop moving goalposts, if news cycles would calm down, everything would work. But for the vast majority of investors, the real source of long-term underperformance is not volatility, valuation errors, or asset allocation mistakes. It is behavioral friction —the steady, invisible resistance created by our own reactions, habits, and emotional impulses. Over time, that friction creates portfolio drag , quietly shaving returns year after year without triggering a single dramatic failure. No margin call. No spectacular blow-up. Just chronic underperformance hiding in plain sight. What Behavioral Friction Ac...
Most investors fear making the wrong move. They obsess over buying at the top, selling at the bottom, picking the wrong stock, choosing the wrong fund, or mistiming the market by a matter of weeks. They replay past mistakes like bad trades are moral failures rather than learning experiences. But history suggests something far more damaging than bad decisions. The biggest losses rarely come from what investors do . They come from what investors don’t do . Errors of omission—missed opportunities, delayed action, uninvested capital, avoided risks—are silent wealth destroyers. They don’t show up as red numbers in an account statement. They don’t trigger margin calls. They don’t generate regret immediately. They simply compound quietly in the background. And by the time investors realize what they’ve lost, the cost is irreversible. What Is an Error of Omission? In investing, errors fall into two categories: Errors of commission : Buying the wrong asset, selling too early, chasi...