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  • Writer's pictureRob Edwards

What’s Your Benchmark?


This year, the performance gap between investment benchmarks is staggering. Growth stocks are full speed ahead, while value stocks are stuck in neutral. All the while, there is the 5% government-guaranteed, short-term Treasury making you re-think everything.

When one investment style runs away from the pack, the temptation to make changes to your asset allocation can be strong. If this is you, know that it’s not unusual. As humans, we’re wired to believe that the grass is always greener on the other side. But giving into the impulse to chase past performance is one of the costliest mistakes you can make as an investor.

For many of the high-net-worth investors that we serve, their investment goals are centered around helping them grow, protect, and enjoy their wealth. That’s their benchmark.

But investing is hard. Always is and always will be. Why? Because the future is always uncertain.

If your goal is to protect your money and have it provide you with a lifetime of income, then don’t get hot and bothered with what high-risk, high-reward growth stocks are doing.

If your goal is to save and build your wealth to support tomorrow’s dreams, then you aren’t going to get there with the safety and certainty of short-term Treasuries.

The reality is that everything that is good in the world has a price to pay. Sometimes the prices are clear and sometimes the prices are hidden. In investing, the price is putting up with uncertainty, volatility, and sometimes even missing out on the party.

At points along your journey, you are going to be challenged by your investments. This is often the point of most uncertainty, but also the point of most opportunity. In these moments, your conviction will be tested: Are you really a long-term investor and are you really willing to pay the price?

If we define our investment success based on short-term performance, then I believe we are destined to fail. Our team believes that successful investing is goal-oriented and planning-focused. Your asset allocation is a by-product, not a starting point.

As circumstances change, sometimes you need to re-evaluate your approach and, if necessary, make adjustments. This is why we work with clients at the outset to have a clear understanding of who they are, what is most important to them, and what they want to accomplish in their life—the reasons we invest in the first place.


Wells Fargo Advisors did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.


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