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Will last year’s returns be this year’s returns?

Chasing last year’s returns is like driving a car forward while looking in the rear-view mirror – perhaps not the safest approach to adopt.

You’ve seen the words, “past performance is no guarantee of future performance” or something similar, on investment documents. These words are not just a requirement – they are absolutely true.

Take a look at the chart below. It clearly shows that asset class performance can change drastically from year to year.

Assett Class Returns Chart NZ

Changes in asset class performance occur for any number of reasons, for example, interest rate changes, political or regulatory factors or fluctuations in prices of goods and services.

So looking to the future, should you increase or decrease your holdings in particular asset classes or do you simply hold the course and disregard the shifts?

No one can predict performance from year to year. But you can take steps to help counteract the uncertainty.

Diversifying your investments and developing a long-term plan based on your unique goals and financial situation can help balance the ups and downs that various asset classes will inevitably face.

At Collinson & Co we have the experience to help you invest wisely. To learn how we approach selecting the right mix of asset classes, please read our investment philosophy, or contact us today for a no-cost, no-obligation discussion:

Hugh Going
Partner, Wealth Management
Direct: +64 9 300 5237
Mobile: +64 21 4982 544

Robert Wilson
Partner, Wealth Management
Direct: +64 9 300 5235
Mobile: +64 21 0279 8035