"That Is Not My Business!"
How self-investors lose more to distraction than to mistakes—and how to stop it.
The Severity of Underperformance
The greatest issue facing those who self-manage their investment portfolios is underperformance. It is a mocking menace that abuses investors, in both bull and bear markets, with the very thing we count on to grow our assets—compounding.
The data is telling:
The annual DALBAR Quantitative Analysis of Investor Behavior (QAIB) report measures the “behavior gap”—the difference between what the market returns and what the actual investor earns.
The 20-Year Gap: Over the 20 years ending in 2024, the S&P 500 averaged roughly 10.35% annually. During that same period, the average equity fund investor earned only 9.24%.
The “Bad Year” Effect: In highly volatile years, the gap explodes. In 2024, despite a roaring bull market, the average equity investor underperformed the S&P 500 by a massive 8.48% (848 basis points). This was one of the largest gaps in the 40-year history of the study.
The Long-Term Cost: A hypothetical $100,000 investment left untouched in the S&P 500 for 20 years would grow to over $717,000. The average self-investor would end up with roughly $345,000—effectively losing half their potential wealth.
Underperforming the market doesn’t put the self-investor “a little behind.” It puts you on a different trajectory altogether. After a decade, you don’t have slightly less—you have roughly half as much.
What Is Really Happening?
It may seem that underperformance is caused by not knowing enough or not doing enough. When in fact these aren’t the problems for most investors who have been at it for a while. This is not necessarily an intelligence problem.
Is this a behavioral problem? Yes, partly. Several factors contribute to the persistent underperformance:
Market Timing (Panic & Greed): Investors tend to buy when they feel “safe” (when prices are high) and sell when they feel “scared” (when prices are low).
The Disposition Effect: The tendency to sell “winners” too early to lock in a feeling of success, while holding onto “losers” for far too long in the hope they’ll “break even.”
Overtrading: According to studies by Barber and Odean, the most active traders underperform the market by an average of 6.5% annually.
Is this a structural problem? Yes, partly. Lack of strategic diversification leaves investors exposed to vulnerable sectors or stocks. And, “chasing heat” (i.e., the latest hot stock or sector) is just a repeat of item 1 above.
Behavioral and structural hurdles explain a part of what happens to the average investor. But, these are symptoms of a problem further upstream.
The compounding effect explains the effects of underperformance mathematically. But not operationally. Using appropriate benchmarks, avoid over-trading and becoming more “disciplined” may address underperformance operationally, but not philosophically.
Underperformance is a problem that must first be addressed upstream—at the source! Where our “beliefs” are formed.
A Matter of Identity
While reading a book by a well-known investor, I paused at a comment made about criticism he had received. Managing $500 Billion is no easy feat. Criticism is to be expected. Yet, about that criticism, he said: “That is not my business.”
Huh?! Really?! It struck me how literally he meant it.
His business is managing investment portfolios. Not managing criticism, his profile, status, followers, admirers, commentators, pundits or even his own clients, but investment portfolios. Nothing interferes with his work, but only because he knows what his business is about.
He has a clear conviction about what he does and how he does it. His obligations and actions are a result of his identity informed by his work. And as such, he has a clearly defined responsibility. He knows his business!
So, why shouldn’t this be any different for the self-investor?
Could the underperformance dilemma ultimately be a result of the self-investor not knowing or failing to define their business?
The furthest place upstream from the problem of underperformance seems to be one of perception—the identity of the self-investor in the investor’s own mind.
What do self-investors believe about what they are doing?
Ask Yourself…
If you manage your own portfolio, ask yourself a simple question, and answer it without qualifying clauses or market caveats:
What decisions are you actually responsible for as a self-investor?
Not what you monitor, not what you have opinions on, not what you would act on “if conditions change.” Which decisions must be made—and which ones are explicitly outside your remit?
Most people cannot answer this cleanly. They describe broad aims, preferences, trading techniques or asset classes, but not obligations. And in the absence of defined responsibility, every new market development quietly petitions for inclusion.
The problem is not that these petitions are unreasonable; it’s that, without a boundary, there is no principled way to refuse them.
Every serious enterprise, financial or otherwise, survives by knowing what it does (its “business”) and what it refuses to do. Airlines do not chase restaurant margins. Cardiologists do not dabble in dermatology. Not because those activities lack merit, but because attention is finite and error is costly.
Self-managing capital is no different—except that most individuals never grant themselves the right to refuse. Every persuasive chart, every all-time high, every newly respectable hedge is treated as a possible obligation.
A functioning investment discipline requires a line that can be spoken without defensiveness or apology: that is not my business. Not as a dismissal of market developments, but as a declaration of role.
Create a Mandate
At the time of publishing, gold is pushing all-time highs. Headlines scream scarcity, portfolios show increasing allocations, newsletters frame it as “essential” insurance. A self-investor without a clearly defined business feels obligated to act: read reports, model scenarios, maybe take a position.
The mandate-less portfolio accumulates a shiny-object that erodes focus elsewhere.
By contrast, a self-manager who has defined their business mandate—say, diversified equity allocation and income-producing assets—can look at the same charts and, with no hesitation, say:
That is not my business!
Gold may rise, it may fall, but neither outcome disturbs the decisions that actually matter. Saying the phrase aloud is not a refusal of opportunity; it is a refusal to dilute purpose.
Rules-Based Investing
To make this idea and your “business” mandate functional rather than rhetorical, it must be backed by rules. Begin by listing the decisions that must be made:
portfolio rebalancing
risk calibration
capital allocation to pre-defined categories and geographies
Then, explicitly catalogue what is off-limits:
speculative themes
hot sectors
or assets outside the mandate.
Assign each forbidden category a default response: awareness without action, logging without allocation, and a disciplined refusal to engage.
Finally, build a simple exception protocol: only opportunities that meet pre-specified criteria for size, conviction, and alignment with your objectives can override the default.
With these guardrails, that is not my business becomes a tool, not a mantra—a daily decision filter that protects both attention and capital while preserving optionality where it truly belongs.
The Payoff for the Self-Investor
The payoff is not a single winning trade, nor the occasional thrill of having been “right.” The payoff is clarity.
By defining your business and refusing what falls outside it, attention is reclaimed, decisions compound rather than conflict, and conviction gains scale. Shiny objects no longer pull you sideways; each position earns its place on merit, not narrative.
In practice, this discipline transforms self-management from a reactive chase into a controlled operation, where capital, time, and judgment reinforce one another.
Saying that is not my business is not denial—it is permission: permission to focus, to act deliberately, and to let the portfolio reflect the intelligence you actually intend to deploy.
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