Losing a market cycle!

Investors tend to make lower returns than the return delivered by mutual funds from a point-to-point basis because of a mix of factors. One reason is market timing. Investors tend to put money in the best performing mutual funds which may in turn be invested in a set of stocks that are in vogue and thus leading the market rally. In the following leg, when these very stocks underperform, their funds take a beating, and investors end up losing across a market cycle.