Why Expert-Led Investing Beats Following the Hype

We've all heard the stories. Someone bought crypto at the right moment and made a fortune. A friend followed an influencer's stock tip and doubled their money. The takeaway seems clear: "If they can do it, why can't I?”

Yet when you look past the success stories and examine what actually happens to most retail investors, a different picture emerges. The average person who manages their own investments tends to underperform the market, not because they picked bad assets, but because of when and how they made their decisions [DALBAR Quantitative Analysis of Investor Behavior 2024].

Meanwhile, those who work with structured, expert-led approaches tend to do better over time — not through luck or timing, but through discipline and oversight.

This article explores why expertise matters more than enthusiasm when it comes to investing, what traps most retail investors fall into, and how you can position yourself on the winning side of that equation.

The Behaviour-Gap: When Your Returns Don’t Match Your Investments

You can own the right assets and still end up with disappointing returns. The gap between what your investments earned and what you actually received is often called the "behaviour gap," and it happens when our decisions get in the way of our portfolio's performance.

Research from around the world consistently shows this pattern.

Malaysia market patterns suggest similar issues.

• In 2024, local retail investors sold RM5.83 billion worth of Malaysian equities, compared to just RM0.96 billion in 2023 [Securities Commission Malaysia Capital Market Review 2024].
• Meanwhile, local institutional investors accumulated RM9.99 billion [Securities Commission Malaysia 2024].
• Retail investors were selling while institutions were buying — a classic sign of the behaviour gap at work.

The lesson isn't complicated. Often what costs us money isn't the market itself, but our own behaviour within it.

Why Behaviour Costs You More Than You Think

Several patterns show up repeatedly among retail investors and drive this behaviour gap:

1. Timing mistakes

People tend to buy after an asset has already risen and sell after it drops. The emotional pull of watching something climb makes us feel like we're missing out, so we jump in, often near the top. Then when prices fall, fear takes over and we sell to "cut our losses," usually right before recovery begins. [https://www.planadviser.com/investors-bad-behavior-led-sharp-underperformance-2024/?utm_source=chatgpt.com]

2. Emotion-driven decisions

Markets move in cycles. News pushes us toward fear or greed. While experts understand this and build systems to manage it, retail investors often let emotions drive their actions. Panic selling during downturns, herd mentality during booms, and anchoring to recent price movements all erode returns over time [PR Newswire, DALBAR 2024].

3. Overconfidence in DIY approaches

With mobile trading apps, zero-commission platforms, and influencers making it look easy, many people believe they can replicate professional results with minimal effort. Yet academic research consistently shows that overconfidence leads to costly mistakes [MDPI 2024]. Confidence feels good, but it doesn't equal competence. [https://www.mdpi.com/2227-7072/13/2/105?utm_source=chatgpt.com]

4. Lack of discipline & oversight

Without clear rules or review processes, portfolios drift. Rebalancing gets skipped. Risk limits are ignored. When there's no structure, the "plan" becomes "let's see what happens." Experts use processes to guide behaviour. Retail investors often skip the process entirely.

What “Expert‐Led Investing” Actually Looks Like

If the average investor underperforms because of behaviour, then how do we tilt the odds in our favour? The answer lies in choosing or building an investment approach that embeds expertise, discipline, and oversight into the process itself.

Pre-defined strategy & risk bands

Experts don't guess where to invest based on what's trending. They design frameworks that adjust portfolios according to risk tolerance, time horizon, and market conditions. The strategy exists before the emotion kicks in.

Governance and oversight

Experts typically operate within governance frameworks: committees, independent audits, peer reviews, regulatory compliance. These structures guard against impulsive decisions and ensure that personal biases don't drive the portfolio off course.

For platforms offering Shariah-compliant investing, this might include a dedicated Shariah board, published screening criteria, periodic audits, and public disclosures. For conventional platforms, it might involve investment committees and regulatory oversight from bodies like the Securities Commission Malaysia.

Behavioural scaffolding

Rather than reacting in real-time to market noise, expert-run portfolios include automated or manual checks. Rebalance at set thresholds. Guard against over-concentration. Force adherence to the plan even when emotions say otherwise.

Transparency and feedback

Experts show their process. From fees to screening criteria, from risk reports to actual performance, transparent platforms reduce surprises and build trust. You know what you're paying for and what you're getting.

Values alignment (where relevant)

For faith-based or ethical investors, expertise goes beyond performance. It includes aligning investments with values — no riba, no speculation, no impermissible sectors. This alignment actually tightens discipline by reducing the temptation to chase hype that doesn't match your principles.

Why This Matters Now More Than Ever

• Heightened market volatility means that behavioural mistakes are more costly.
• Access to trading is easier than ever (zero comms, mobile apps), but that access doesn’t equal expertise.
• Values-based investing is growing, meaning more platforms are mixing ethics + performance but aligning values requires even more discipline and governance.

Barclays’ recent commentary says: “A curious quirk of investing is that investors can often underperform the very investments they are holding… after accounting for their decisions.” Barclays Private Bank

In other words, structure matters as much as strategy.

How to Choose an “Expert-Led” Platform (Checklist)

Before you commit, ask:

• Are there credentialed investment professionals and governance oversight?
• Is the investment process transparent (screening, risk bands, rebalancing)?
• Are fees, performance and risks clearly disclosed?
• Does the platform include behavioural guardrails against human impulse?
• If you care about values (faith or ethics), is there a publicly disclosed alignment process?
• Is there accountability — audits, independent review, client protections?

When the answer to all of those is “Yes”, you’re getting close to expert-led rather than ad-driven.

Bringing This to Life: How Wahed Does It

While this article isn’t about commercials, it’s worth pointing out real-world exemplars of the model. At Wahed:

• A dedicated Shariah board reviews every investment for faith-compliance.
• Screening criteria and methodology are published; you can see how decisions are made.
• Portfolios are rebalanced according to risk bands, not hype pulses.
• Clients receive updates, performance numbers and access to disclosures.
• Ethics and expertise are fused to one.

By choosing a platform that combines oversight and values, you reduce the odds of falling into the behaviour gap.

Conclusion

In investing, the question isn’t just “How much will I make?” but “How much less will I lose because of my own decisions?” The numbers are clear: emotional investing, hype chasing, and unregulated advice cost real returns.

When you step back and pause, you realise: you wouldn’t trust an unlicensed flyer to pilot your plane. Why then would you trust unverified advice for your money?

Your time, energy and capital deserve more than convenience and trendiness. They deserve structure, oversight and values.

Be smart. Be consistent. Trust the experts — not the hype.

Disclaimer: This article is for general information and educational purposes only and has not been reviewed by the Securities Commission Malaysia. The information does not constitute investment advice or an offer to buy or sell any capital market product. Always verify that your financial adviser or platform is licensed and regulated by the relevant authorities.