You can’t drive your financial future by staring at the past.
Picture this: You’re at a dinner party. Someone’s bragging about how they made a killing on [insert trendy investment of the year]—and suddenly your own strategy feels… underwhelming.
Should you have jumped in on that trend? Are you being too cautious? Is your portfolio missing something?
You’re not alone.
Most investors—even smart, seasoned ones—fall prey to what we call Rearview Investing: making financial decisions based on what worked last year, for someone else, in a completely different vehicle.
And it’s not just a harmless habit. It’s one of the most dangerous ways to sabotage a well-crafted plan.
📉 The Data Doesn’t Lie
Study after study shows that the average investor significantly underperforms the market—not because of access or intelligence, but because of behavior.
We tend to buy high (when something looks hot and everyone else is buying) and sell low (when fear kicks in).
One well-known DALBAR study found that over a 20-year period, the S&P 500 averaged around 8–10% annually. The average investor? Closer to 4–5%. That gap represents thousands—if not hundreds of thousands—of dollars lost to reactionary decisions.
🙈 But What About Their Returns?
One of the most damaging things you can do is compare your returns to someone else’s.
Because you’re not seeing the full picture. You don’t know:
- The risks they’re taking
- How concentrated their investments are
- Whether they’re using leverage, options, or taking big tax hits
- If they actually made money or are just saying they did
Most importantly: you’re not living their life.
Their portfolio wasn’t built to support your retirement, your income needs, or your long-term goals. So measuring your plan against theirs is like comparing a minivan on a cross-country family trip to a sports car at the racetrack.
It’s not just unfair—it’s misleading.
🚨 Real Example: Buying the Past
We’ve seen it more times than we can count. A prospective client comes in frustrated with their portfolio, convinced their strategy just isn’t keeping up. They’d like to “see what we can do”.
Often, they’ve bounced between approaches—or even advisors—trying to chase better returns.
But when we dig in, a pattern emerges:
They’ve been buying in after the growth and selling out before the recovery.
In other words, making decisions based on last year’s winners instead of this year’s goals.
It’s a subtle form of Rearview Investing—and it’s one of the most common (and costly) mistakes we see people make before they work with us.
🛠️ What Actually Works?
Here’s what we help clients do instead:
- Define success by personal benchmarks, not market headlines.
It’s not about beating the S&P—it’s about funding your life. - Segment investments based on time horizon.
Short-term needs shouldn’t be at the mercy of long-term volatility. - Follow a rules-based rebalancing plan.
No guesswork, no chasing—just disciplined course correction. - Work with a human guide to check emotions.
A calm voice in a turbulent market is often the most valuable part of a financial plan.
🧭 The Bottom Line
If you’ve found yourself second-guessing your strategy because someone else “did better” or because your returns don’t match last year’s headlines—pause.
You might be driving your retirement with your eyes glued to the rearview mirror.
Let’s shift the focus forward.
P.S. Wondering If Your Plan Is Still on Track?
Let’s talk. We’ll help you assess whether your investments are doing what they’re supposed to do—not what someone else’s are doing.
Because you’re not chasing someone else’s returns. You’re building your own version of freedom.
Our Attorneys Want Us to Remind You:
This blog post is for informational and educational purposes only and should not be construed as personalized investment advice.
All investment strategies involve risk, including the potential loss of principal. Past performance is not indicative of future results, and no investment strategy can guarantee success. Examples provided are hypothetical or based on common prospective-client experiences and are for illustrative purposes only; they do not reflect actual client results.
Any references to specific investments, financial outcomes, or market performance (including the S&P 500 or DALBAR data) are for context only and should not be relied upon as the sole basis for financial decisions.
For guidance tailored to your specific circumstances, please consult with a qualified financial professional.
Impact Wealth Management is a registered investment advisor offering advisory services in jurisdictions where properly registered or exempt from registration.