The average investor loses out on about 15% of returns over 10 years because of these common mistakes. Are you getting the most from your investments?

That may not seem so bad, but over a decade, that gap can eat roughly 15% of your gains.

Instead of following the reactive approach above that loses you money in the long run, if you want your results to match the headline number, you need a plan that beats your instincts.

Here’s how you can really match the reporting by the funds, including tips for avoiding risk and maximizing profits for your ETFs and mutual funds.

What does the data say?

Investment firm Morningstar has been studying the dollar-weighted and time-weighted returns of mutual funds and ETFs for over two decades. Morningstar’s Mind the Gap US 2025 report (1) compares what funds report with what investors actually earn over 10 years.

Mutual fund and ETF performance tables present average annual total returns using time-weighted methods that strip out investor cash-flow timing.

In other words, the X factor of investor behavior is removed, reporting on how the fund ideally performs. Your personal return is money-weighted and depends on when you add or pull cash.

To measure the difference in performance for individuals whose deposits change the amount of assets they have over time, the study uses dollar-weighted averaging, which factors in the timing and size of contributions and withdrawals.

According to Morningstar, “this estimate approximates the return of the average dollar in the pool over the study period.” That difference between time and dollar returns is the core of the investor return gap.

With apples-to-apples numbers in hand, Morningstar estimates that for the 10 years ended December 31, 2023, fund investors earned 6.3% annually versus 7.3% for the funds. (2)

It’s important to note, as the report does, that this is not a “dumb money” story. Even good habits like steady contributions or rebalancing can create differences between what a fund reports and what you earn.

The gap between time-weighted and dollar-weighted returns is greater in volatile, narrow funds, while diversified, all-in-one allocations tend to keep investors closer to the posted returns.

Better investing habits

As of this writing, just seven stocks make up more than a third of the S&P 500. Collectively, those seven stocks (called “The Magnificent 7”), have increased in value by almost 700% over the last ten years.

One of them — Nvidia — has increased in value by more than 25,000% in that period, which means $100 invested in that stock in 2015 would be worth more than $25,000 today. (3) It’s tempting to look at that case and decide to put all your money on the most speculative, high-return stock you can find. But for every Nvidia, there are thousands of promising companies that didn’t return as much.

Even the other six members of the ‘Mag 7’ put together haven’t returned that much, a group that includes Amazon, Microsoft, Meta (Facebook), Tesla, Apple and Google. If you bet on a single stock, you might also pick a company like Enron, Worldcom or WeWork that goes bankrupt.

Practicing investing discipline by keeping your money in an all-market fund, practicing dollar-cost averaging, and resisting the temptation to chase double-digit yearly returns will instead give you respectable returns on your money.

After all, it’s better to get rich slowly than to lose your investments fast.

Slow and steady wins the race

Investing is always a trade off between risk and reward. For older people, especially those within a decade or two of retirement, predictable results are preferable to big ups and downs.

A steady 15% over ten years will be easier to stomach than swings from 25% up one year to -15% the next. The real test is what you can live with without bailing out at the worst moment.