For What It’s Worth: Avoiding “Tracking-Error Regret” – by Steve Lowrie

One way that many investors measure financial success is by comparing their returns against popular benchmarks like the S&P/TSX Composite Index. It can be comforting to know how your investments compare to others … but there’s a catch. If you are comparing apples to oranges, the results can misinform rather than enlighten your decision-making, knocking you off-course from the very success you’re seeking to achieve. The financial industry has a term for this: tracking-error regret. One of our key roles as your advisor is to help you recognize tracking-error regret, and avoid succumbing to it.

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