Investment performance – what matters most?

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Investment performance – what matters most?

When it comes to investment performance, what you think matters and what actually matters are not always the same.

The media will have you believe that investing is all about picking the best fund and getting in and out of the market at just the right time.

What matters most when it comes to investments

But that stuff doesn’t really matter. In fact, chasing the shiny new funds promoted in the Sunday papers is more likely to harm than it is to to help.

The clearest evidence of this is that investment returns and investor returns are almost always different.

It is precisely the hunt for the best investment that creates The Behavior Gap:

Investment returns vs investor returns behaviour gap

Of course; you, (the investor), will earn the investment return if you invest your money and then don’t touch it. No buying, no selling, just holding.

What really matters is your behaviour. So whilst it may sound counterintuitive – don’t just do something, sit there.


All the best,

James Mackay, Independent Financial Adviser in Bristol

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