Here is a sentence that should not be possible. The fund went up. The people who owned the fund went down.
Jason Zweig laid out the arithmetic in Saturday’s Journal, using the first batch of bitcoin ETFs. Almost a dozen of them launched on the same day in January 2024. Bitcoin was higher on June 30 of this year than it was on launch day.
So the owners made money. They did not. As a group, they added cash after the good stretches and pulled it out after the bad ones. Jeffrey Ptak, an analyst at Morningstar who has written extensively about this, put a number on the damage.
It isn’t really about bitcoin
This is the part worth sitting with. Zweig wrote that he has been writing about this behavior gap since long before bitcoin existed, and that it isn’t just individual investors who underperform their own investments. Financial advisers and big institutions do it too. He is not selling you a professional. He is describing a human reflex. Buying after a fund goes up feels like validation. Selling after it goes down feels like safety.
The same mistake, with more zeroes
Monday’s Journal carried a separate story on the other end of the wealth ladder, reported by Heather Gillers. Clearwater Analytics looked at private wealth portfolios of $30 million or more and found that after years of blockbuster stock-market performance, those households are not locking in gains by moving them into bonds. Their stock share simply swelled, from an average 44.9% of holdings three years ago to 47.4% as of June 30. Clearwater’s head of research, Matthew Vegari, put it plainly: there really hasn’t been much rebalancing at all. That drift has been profitable so far, which is exactly why nobody touched it. No one in that study lost 14.30 points a year. But nobody chose 47.4% either. It just happened to them.
It is much better to allocate than speculate, he wrote. If you bet money on whims and hunches, you’ll pull it right back out based on gut feelings, too. Instead, pick a percentage and stick to it.
His examples were small on purpose. Think low-volatility stocks are an underappreciated hedge? Put 5% there. Really think bitcoin will transform finance? Put 1% in it.
Then the rule does the work. When the bet goes cold and shrinks below your target percentage, buy enough to get back to your allocation. When it gets hot, sell enough to get it down to your target. Use your retirement account, where trades won’t trigger tax bills.
And when the urge to gamble strikes, he says use a ’mad money’ account segregated from the rest of your portfolio.
You do not need a view on bitcoin to take something from this. The general principle is old and boring and it survives every market: a portfolio needs a target percentage and a rule for what happens when it drifts away from that target. Without the rule, the market picks your allocation for you, and it always picks the thing that just went up. If you are not sure what your own target is, or when it was last checked, that is a fine thing to bring to a review. Pull out your most recent statement and ask two questions. What is my target? How far from it am I today?
This is the behavior evidence page of the week, and it is unusually clean: the funds went up, the owners came out behind, and Morningstar’s Jeffrey Ptak puts the shortfall at 14.30 points a year. Zweig is honest that financial advisers and big institutions underperform their own investments too, so this is not a page about hiring someone — it is a page about having a rule. Note that portfolios of $30 million or more aren’t immune to the rebalancing failure either: Clearwater Analytics found their equity share drifted from 44.9% to 47.4% over three years. That is a drift, not a measured loss — do not present it as the same 14.30-point toll. Zweig independently describes the mechanics we already run: pick a target percentage, buy back to it when it falls short, sell down to it when it runs hot, and do the trading inside the retirement account. Use it in reviews to explain what a rule is for. Keep his scope honest — he applied it to small speculative sleeves (5% low-volatility, 1% bitcoin) plus a segregated “mad money” account, not to a whole-portfolio process.
GBTC
Mentioned for context only. A mention is not a recommendation — see the portfolios page for what the books actually hold.