I was recently reading an article referencing the Harvard Endowment’s 2016 fiscal year loss of $2 billion dollars. A clearly unacceptable outcome (insert sarcasm here). In light of a somewhat scathing student article from The Harvard Crimson, Isaac Presley of Cordant Wealth Partners had some great advice on how NOT to evaluate investment performance. This tends to be a topic we discuss frequently, but that is for a reason. Investor behavior regarding manager performance has been proven to have large ramifications for an investor’s long-term performance. I’ll give Isaac’s bullet points below, but go to his blog and read the details; it will be well worth your time, especially if you follow his advice.
Don’t assess your investment performance…
- 1. Over the wrong time frame
- 2. Without proper perspective
- 3. Expecting to outperform every year
- 4. With an expectation that corrective action is always required