Why Most Investors Underperform the Market......By Lane Clark of TPP.

Why Most Investors Underperform the Market......

(And it’s not because they’re bad at investing)

Most investors believe underperformance is their fault.

They think they:

• Bought the wrong funds
• Entered at the wrong time
• Didn’t know enough
• Or lacked discipline

The reality is far less personal, and far more structural.

Most investors underperform the market because the system they invest through is stacked against them.

Let’s break it down.

1. Fees quietly do more damage than bad decisions

This is the least exciting reason, and the most powerful.

Management fees.
Platform fees.
Fund fees.
Adviser fees.

Individually, they don’t look dramatic.
Over time, they are devastating.

A portfolio that tracks the market minus 1–2% per year doesn’t feel broken in any single year, but over a decade, the gap becomes enormous.

Most investors don’t underperform because markets failed them.
They underperform because fees compound against them.

2. Most portfolios are designed to look safe, not perform well

Traditional portfolios are built to:

• Avoid complaints
• Hug benchmarks
• Reduce career risk for the adviser

Not to optimise outcomes for the investor.

That usually means:

• Always being invested
• Limited ability to step aside
• No protection in sideways or volatile markets

When markets rise strongly, this looks fine.
When markets stall, chop, or fall, returns quietly disappear.

3. Behaviour matters more than people realise

Even disciplined investors struggle with:

• Buying after good performance
• Selling after losses
• Sitting through drawdowns
• Second-guessing decisions

The average investor’s real-world return is often several percentage points below the funds they invest in, purely because of timing and emotion.

This isn’t a flaw in the investor.
It’s human nature.

4. Passive investing works… until it doesn’t

Passive investing has been hugely successful, in the right environment.

Long, smooth bull markets.
Low volatility.
Falling interest rates.

But markets don’t always behave like that.

In flat, choppy, or volatile periods:

• Passive investors experience full drawdowns
• Returns can go nowhere for years
• Risk is ignored until it hurts

That’s where many investors give up, usually at the worst moment.

5. Underperformance isn’t about intelligence, it’s about structure

Most investors are doing the best they can with the tools they’re given.

But:

• High fees
• Static portfolios
• No adaptability
• Full exposure at all times

…make it very hard to win.

At TPP, we believe the solution isn’t predicting markets, it’s structuring portfolios differently.

How TPP approaches this differently

TPP portfolios are designed around a simple idea:

You don’t need markets to always go up to make progress.

Our strategies:

• Actively manage exposure
• Step aside when conditions deteriorate
• Focus on probability, not prediction
• Aim to outperform benchmarks net of fees

Particularly in volatile or sideways markets, where most investors struggle, this approach can make a meaningful difference.

The bottom line

Most investors don’t underperform because they’re careless or uninformed.

They underperform because:

• Fees compound quietly
• Portfolios aren’t adaptable
• Behaviour is underestimated
• And risk is misunderstood

Fix the structure, and outcomes improve.

👉 Want to see how this applies to your portfolio?

• Book a free portfolio consultation by clicking here.
• Or explore how our strategies work with a demo account by clicking here.

Because investing shouldn’t feel like guesswork.

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Let us know if you think we can assist.

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TPP
Built for markets that don’t play nice.

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