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Optimal Investment Performance: A Guide to Success

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Roger Perrett

Executive Financial Advisor

In the world of investments, everyone strives for one common goal: optimal performance. After all, who wouldn’t want their hard-earned money to grow and flourish? Yet, achieving and maintaining optimal investment performance is often easier said than done. The landscape of financial markets is constantly shifting, and what may have been a winning strategy yesterday may not necessarily yield the same results tomorrow.

The challenge

One of the biggest pitfalls that investors face is the misconception that past success guarantees future performance. Just because an investment manager or super fund delivered stellar returns in the past doesn’t mean they will continue to do so in the future. It’s a harsh reality that many investors only realize years down the line, when they discover that what they thought was a good investment, has been underperforming for years.

There are several reasons why investments may falter over time:

  1. Changes in Leadership: Great investment managers may resign or retire, leaving behind a void that is challenging to fill. Without the guiding hand of a skilled manager, investment strategies may falter, and performance may suffer.
  2. Failure to Adapt: Markets are dynamic and ever evolving. Investment strategies that once thrived may become obsolete in the face of changing market conditions. When investment managers fail to adapt their strategies accordingly, portfolios can suffer as a result.
  3. Investment Managers pre-empting what is next: We often see fund managers having slower performance versus their peers, when they sense a correction is on its way or they view assets are simply overvalued. Some Fund managers don’t want to simply purchase at any price and wait for the share market to dip before seeing the opportunity to buy.
  4. Diversification: With portfolio’s we do not necessarily want all the investments to go up and down in unison. A diversified portfolio is one where there are uncorrelated strategies, so it may be best to keep investments which on first look appear to be underperforming.
  5. Undervalued Assets Classes: Asset classes can be under valued and often when it appears the investments are under performing, we should be investing more, rather than selling the investment below value.
  6. Mismatched Portfolios: In some cases, investment portfolios may not be aligned with investors’ risk profiles and performance expectations. This mismatch can lead to suboptimal performance or unnecessary volatility.

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So, what’s the solution?

How can investors ensure that their portfolios continue to deliver optimal performance over time? The key lies in a three-step process:

  1. Regular Performance Reviews: It’s crucial to regularly review your investment performance to ensure that your portfolio is on track to meet your goals. By closely monitoring performance metrics, you can identify any red flags early on and take corrective action as needed.
  2. Assessing Universality: Understand whether underperformance is affecting everyone or if it’s isolated to specific investments or sectors. This helps in determining whether adjustments need to be made to your portfolio. For example, if the whole market has gone down, this is not your investment.
  3. Understanding why: the investment has not performed. We can then determine whether there is a reason for concern or whether we are presented an opportunity to invest more.
  4. “Hire and Fire” Approach: When necessary, be prepared to make tough decisions about hiring or firing investment managers. If a manager’s performance consistently falls short of expectations, it may be time to consider alternative options.

We understand the complexities of investment performance and the importance of aligning portfolios with investors’ goals and risk profiles. With access to research from reputable sources like Morningstar, we can evaluate your portfolio’s performance and determine whether optimization is needed.

Don’t leave your financial future to chance. Contact us today to schedule a consultation and ensure that your investment portfolio is performing at its best. With our expertise and guidance, you can navigate the path to optimal investment performance with confidence and clarity.


This information is general advice. We have not considered your objectives, personal or financial circumstances. You should consider the appropriateness of the advice for your circumstances before making any decision. You should obtain and consider the relevant Product Disclosure Statement and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.

Past performance is not an indication of future performance.

This presentation has been prepared and presented by Roger Perrett, Freshwater Wealth Management Pty Ltd CAR no.1307016, Alliance Wealth Pty Ltd AFSL No.449221. This information cannot be used or copied in whole or part without our express written consent.

While every effort has been made to ensure the accuracy of the information, it is not guaranteed. It is based on our understanding of regulations and laws as at the publication date. As these are subject to change you should talk to a professional adviser for the most up-to-date information.

To the maximum extent permitted by law, no person including Alliance Wealth Pty Ltd nor its related entities, employees or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.

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