Looking Beyond “Have I Made Money?”
One of the first questions people ask when reviewing their investments is:
“Have I made money?”
It’s a perfectly reasonable question.
But it isn’t always the right one.
An investment can increase in value and still not be performing as well as it should.
Equally, a portfolio that has fallen in value over a short period may still be on track to achieve its long-term objectives.
The better question to ask is:
“Are my investments performing as expected for my goals, my timeframe and the level of risk I’m taking?”
Looking Beyond the Numbers
Imagine two investors who both check their portfolio at the end of the year.
One is disappointed because their investments only grew by a small amount.
The other is pleased because their portfolio remained stable during a period of market volatility.
Who has the better investment?
The answer depends entirely on their financial goals, investment timeframe and attitude to risk.
Successful investing isn’t simply about chasing the highest return.
It’s about ensuring your investments continue to support your long-term financial plan.
What Should You Be Looking At?
A meaningful investment review should consider more than whether your portfolio has gone up or down.
Ask yourself:
- Are my returns in line with my long-term objectives?
- Am I taking an appropriate level of investment risk?
- How has my portfolio performed over a meaningful period?
- Is my investment strategy still suitable for my current circumstances?
Performance should always be judged in context, not by one number alone.
Short-Term Performance Can Be Misleading
Markets move every day.
Some years deliver exceptional returns.
Others experience significant falls.
That’s why reviewing performance over a few weeks or months rarely tells you very much.
Instead, consider questions such as:
- How has my portfolio performed over the last three, five or ten years?
- Has it recovered well after periods of market volatility?
- Is it progressing broadly as I would expect over the long term?
Successful investing is about staying focused on the journey rather than reacting to every bump in the road.
Is the Return Worth the Risk?
Every investment involves a balance between risk and potential reward.
Generally speaking:
- Higher-risk investments aim to deliver higher long-term returns.
- Lower-risk investments typically offer greater stability but more modest growth.
A good investment isn’t necessarily the one with the highest return.
It’s the one that delivers an appropriate return for the level of risk you’ve chosen to take.
A Simple Example
Imagine two investors each invested €100,000 five years ago.
| Investor | Portfolio | Average Annual Return | Value After 5 Years* |
|---|---|---|---|
| Sarah | Higher-risk portfolio | 8% | €146,900 |
| John | Balanced portfolio | 6% | €133,800 |
At first glance, Sarah appears to have achieved the better result.
However, if John plans to retire in the next few years, his balanced portfolio may actually be the more appropriate choice for his circumstances.
Investment success isn’t about achieving the highest possible return.
It’s about achieving the return that’s appropriate for your financial goals and your willingness to accept investment risk.
Figures are illustrative only and assume annual compound growth before charges. Actual investment returns are not guaranteed.
Are Your Investments Still Fit for Purpose?
Your investment portfolio should evolve as your life changes.
If your circumstances have changed since you first invested, it’s worth asking yourself:
- Are my financial goals still the same?
- Has my attitude to risk changed?
- Am I approaching retirement?
- Does my portfolio still reflect what I’m trying to achieve?
A portfolio that suited you ten years ago may no longer be the right fit today.
Why Regular Reviews Matter
Reviewing your investments doesn’t mean making changes every year.
Often, a review simply confirms that you’re on the right track.
An annual review provides an opportunity to:
- Assess long-term investment performance.
- Review your level of investment risk.
- Check that your portfolio remains well diversified.
- Ensure your investments continue to support your financial objectives.
Small adjustments made over time can help keep your financial plan on course.
How Oaktree Financial Services Can Help
Every investor’s circumstances are different.
That’s why investment advice should always be tailored to the individual.
At Oaktree Financial Services, we believe investment reviews should provide clarity, not confusion.
We can help you:
- Understand whether your investments are performing as expected.
- Assess whether you’re taking an appropriate level of risk.
- Review whether your portfolio remains aligned with your financial goals.
- Consider whether changes may be appropriate as your circumstances evolve.
- Build a long-term investment strategy designed around your objectives.
Our focus isn’t on chasing the best-performing fund.
It’s on helping you build and maintain an investment strategy that’s appropriate for your long-term financial goals.
Adrian Godwin is a Senior Financial Consultant and the co-founder and managing director of Oaktree Financial Services. With a background in accounting and tax advising, Adrian specialises in estate planning and wealth management.Adrian offers clients reassurance through best practice solutions. His unique skill set and qualifications enable clients to develop comprehensive life plans that align with their goals.
