Doing nothing is a decision - and it’s costing investors

Multiple global studies show that the average investor consistently underperforms the market by 3-5 percentage points each year - not because of poor fund selection, but because of behavioural choices (or lack thereof). One of the biggest culprits is portfolio inertia: leaving investments unchanged long after conditions have shifted.

“Set and forget” investing has long been positioned as a mark of discipline: choose a strategy, stay invested, and avoid emotional reactions to market noise. It sounds sensible - and often is - but according to Findotec, the real risk emerges when discipline turns into complacency. Humans are wired to avoid regret. Changing course feels risky; staying put feels responsible - even when the evidence suggests otherwise.

“Inaction is often mistaken for prudence,” says Pedri Reyneke, Fund Manager of Findotec. “But when a portfolio isn’t evaluated against actual market performance, you’re still making a decision - one driven by habit, not data.”

The biggest drag on long-term outcomes is not volatility or market downturns, but quiet underperformance. A portfolio can remain in steady, well-constructed funds for years and still fall behind. Reviews are infrequent, markets evolve, leadership changes, and better-performing alternatives emerge - yet the investor hasn’t taken action. Over time, these small differences compound into meaningful losses of opportunity.

Findotec believes the solution is not picking the right fund once, but having a clear, evidence-driven process for reassessment. Portfolios should respond to measurable changes in performance, rather than relying on comfort, loyalty, or outdated assumptions. This reflects a broader global shift toward rules-based investment approaches: predefined criteria trigger changes systematically, rather than emotionally. The goal is accountability, not constant trading - a clear answer to the simple question: what happens when something stops working?

“The real risk isn’t making the wrong decision,” Reyneke explains. “It’s avoiding decisions altogether. Over long periods, small differences in performance matter, and ignoring them can be far more damaging than responding to them. Investors don’t need more complexity. They need confidence that their capital isn’t being left on autopilot while the market moves on.”

The familiar active versus passive debate misses the point. Labels matter far less than process. Investors want to know how performance is measured, how often assumptions are tested, and what prompts action when results change. “Set and forget” may feel reassuring, but in a system built on compounding, doing nothing is not neutral. It is a strategy - and one that deserves far more scrutiny than it typically receives.