The Performance Chase

Sound advice from James Osborne:

Your strategy is not going to work unless you work with it. I have beaten this dead horse well into the ground, but if you keep looking at your neighbor’s returns, you’re committing investor suicide. Somebody, somewhere did better than you this year. Lots of somebodies. Anyone who works for Facebook or Amazon or Netflix and has a bunch of their net worth in company stock probably crushed you this year. Is that a strategy you should pursue? Probably not, but you need to remind yourself why you have the strategy you do. Everything has a bad year. Value stocks get cheaper. Trendfollowers get whipsawed. S&P 500 investors get caught in tech bubbles. “Factors” don’t show up.

You will either get this or you won’t. If you think you are entitled to the best return of the best strategy every year, good luck to you. You will bounce from strategy to strategy, constantly disappointed with your returns. You will chase performance and fail to capture the long term return of ANY strategy, let alone the “best” strategy. You’ll fire dozens of financial advisors and complain to your friends about what schmucks these clowns are. You’ll say the markets are rigged. For you, they are and always will be.

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