The underwhelming performance of fund investors returned during the financial crisis of 2008–2009 and the subsequent recovery. Fund investors have been chasing past performance since time immemorial, allowing their emotions—perhaps even their greed—to overwhelm their reason. Many investors reacted strongly—and ultimately counterproductively—to the

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Quite simply, they want to buy when they feel good about buying or when they feel safe. And they want to sell when they don’t feel good or safe anymore. Unfortunately, this is often contrary to the principle of buy low, sell high. When markets are low, people don’t feel safe. When markets are high, they do. So they end up buying at the top, when th

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