The Investment That Crushed It Last Year Could Be Destroying Your Portfolio Today

The Investment That Crushed It Last Year Could Be Destroying Your Portfolio Today

The tale is as old as time. A fund, sector, or investment strategy has a phenomenal run. The returns are eye-catching. Clients start asking about it, advisors start pitching it. Then the performance fades, investors are left holding the bag, and the cycle starts all over again with the next hot idea.

This isn't bad luck. It's a predictable, data-confirmed pattern — one that plays out with both retail and institutional investors alike. And it's one of the most expensive mistakes you can make.

The Numbers Don't Lie

Every year, S&P Global publishes the SPIVA Persistence Scorecard — a report that tracks whether top-performing funds actually stay on top. The results are humbling.

Of U.S. equity funds that ranked in the top quartile of performance in 2023, 69% held that status through 2024. Sounds decent, right? But by 2025, only 33% remained.

Now zoom out to five years. Starting in 2021, less than 10% of funds stayed in the top half of performers for five consecutive years.

Let that sink in.

The Real Problem Isn't the Fund

The problem is the behaviour of chasing performance.

Following performance feels rational. If something has been working, why wouldn't it keep working? No one wants to be the one missing out. But markets don't work that way. Strong-performing markets revert to a mean. Today's winners rotate. The sector that dominated last year often lags the next.

And yet, behavioural patterns and the fear of missing out push investors straight into this trap. When something is up, they buy. When performance disappoints, they sell. Sell low, buy high — the exact opposite of what creates wealth.

The Case for Global Diversification (And a Little Boredom)

A well-diversified portfolio of global equities, built on evidence and held for the long run, has never permanently failed an investor. Every major market drawdown in history has eventually recovered and gone on to new highs. That's not a promise about the future — it's a track record of global equities have performed.

The irony is that the best portfolios are often the most boring ones. A broad basket of global stocks, rebalanced systematically, with low costs. No heroics. No hot funds. No quarterly reshuffling based on what's been working lately.

The boring portfolio is hard to sell at a cocktail party. It's easy to hold when markets are volatile.

The investor who knows what they own is better positioned for the future

When markets drop and they will  investors who can't explain what they own or why they own it are the first to sell. They have no anchor. When a talking head on BNN says the market looks scary, or a colleague mentions they moved to cash, there's nothing to hold them in place. So they bail, often right before the recovery.

Contrast that with an investor who holds a simple, globally diversified portfolio and genuinely understands the logic behind it: that owning thousands of companies across the world means no single economy, sector, or political event can permanently derail them. That short-term volatility is the price of long-term returns. That every major drawdown in market history has recovered. That investor has a reason to stay. And staying is where the wealth is built.

This is why we believe in keeping portfolios simple enough to explain. Not because complexity is always bad, but because you can only be disciplined about something you understand. A strategy you can articulate is a strategy you can hold through discomfort.

Many investment strategies promise increased wealth, but the reality is that keeping things simple over long periods of time is far more likely to make you rich.

The Hardest Part Has Nothing to Do With Investing

Here's the truth. The hardest part of long-term investing is psychological. It's not finding the right fund. It's not market timing. It's tolerating discomfort — periods where your portfolio lags, where headlines are terrifying, where everything in your gut says do something. Combine this with watching other areas of the market outperform, and the game is stacked against you before you've made a single decision.

Discipline and patience aren't passive qualities. They're active choices made over and over again, often when they feel the most uncomfortable.

At Endeavour Wealth Management, this is at the core of what we do. We don't chase what worked last year. We build portfolios grounded in evidence, keep them simple enough that you understand what you own, and then help you stay the course when staying the course is hard.

Because whatever the strategy, it only works if you actually hold it.

If you'd like to learn more about evidence-based investing and whether your current portfolio is built to last, reach out  we'd be happy to have that conversation.

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This information has been prepared by Brandt Butt who is an Investment Advisor and Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor and Portfolio Manager can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and a business name under which iA Private Wealth Inc. operates.