Chasing Returns // Investment Series

Chasing Returns

This needs to be made clear.

Don’t go chasing investment returns.

Don’t go picking the funds based on returns.

And please for the love of designer handbags, don’t go comparing your shoes, handbags or investment account returns to your neighbours!!

Two accounts will never look the same even if they both have the same amount of initial money invested and they are both invested in the exact same mutual fund, stock, ETF (exchange traded funds), or other liquid assets if they are invested at different times.

This is where the problem comes in.

You talk to your neighbor or you read the annual returns for your investment and it looks nothing like the returns that you received in your personal account – good or bad!

You see, the day you entered the market will make your market returns completely unique to you!

Comparing to your neighbour will be useless,

Over time this conundrum solves itself, but only after staying invested for years (like quite a few years) will your returns begin to reflect those of your neighbour and even then it depends on if you are buying or selling units in the interim.

The thing is this.

You don’t know if you bought at the top or the trough.

But that all aside, you look at your neighbour or your return on your statement and see you only did 3% when your neighbour actually did 10%+ for the year and you want to jump ship even if you were both invested in the exact same fund.

This happened to me when, a year and a half ago, I moved both my daughters RESPs from one institution to another institution, from the same funds to the same funds.

Even though the paperwork and trades were submitted on the same day, they 2 accounts came over to the new institution 2 weeks apart.

Funny enough, one account was invested at the peak of the market that year and one was invested in the pits a few weeks later.

A year later these 2 accounts had a return difference of 10.8%!!!

One account on the date I checked it was -2.6% and one was 8.2%!

Keep in mind, these 2 accounts are showing up on my dashboard right beside each other and have had the exact same amount of money put into them and always held the same underlying investments.

This isn’t even me comparing to my neighbour or other clients, this is me comparing me to me!!

Needless to say, only one of my daughters is allowed to go to an IVY league university! HA!

But, all kidding aside, I didn’t run out and change my investment – you see…

The investment is still a good investment. The fund is still a good fund.

The underlying investment is still good even if one of my account showed a negative return for the year – that had to do with timing – nothing else.

So, my message to you for week two of this investment series is this:


Once you know you have good fund managers, a good investment – don’t sell because one year was bad.

On that note, maybe you lucked out and killed it with 18% your first year – congrats, but then don’t expect that to be the norm.

Markets will do market things and carry with them lots of volatility – more ups and downs than your toddler or teenage daughter!

You have to go with the flow.

This goes back to choosing your investments with the best of your knowledge, doing a quick gut check, make a plan and then releasing it to do its thing.

Chasing returns is going to get you killed in the world of investing.

Chasing returns will just cause you stress and leave you totally unsatisfied.

Don’t do it!

You could be throwing out the baby with the bath water.

I didn’t even get deep into regular withdrawals and deposits made into your account which can drastically reduce or increase your return as well.

Honestly, there are so many factors that you really just need not compare to anyone else, because it will either make you feel smart or stupid – neither is usually the case when it comes to investing because there is the element that no one can control, call it luck, or just call it the market.

The phrase “you do you” becomes even more important when it comes to investing!

That’s why my catch phrase at the end of every blog is Live Your Legacy and not, live your neighbours legacy…

you can’t.

Don’t try to copy them, it will probably end up bad for you.

Like picking stocks at the water-cooler at work or over BBQ wieners at the family reunion –

it rarely ends well.

And now you know….

Live Your Legacy!

xx Lisa

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