This is a line that you commonly see on the websites and marketing material of every single type of investment management outfit out there.
It’s legally required by the SEC in the US for a fund to tell all investors this warning/disclaimer. It’s one of those ubiquitous statements that you hear or read everywhere like when people talk about how you can think about investing your money immediately after or before saying that “this is not investment advice,” and “all information discussed is for entertainment purposes only.”
But as of late I’ve started to see this legal disclaimer in a new light, and it’s less than obvious hidden meaning hit me like lightning one day.
Indeed “past performance is not indicative of future results.” It goes into our relationship with both the past and the future.
You can use that principle to remind yourself to stay focused and keep your attention on the present moment because in reality there is nothing else.
So what if you are still searching for that thing, that opportunity, that business deal, that transaction, that job, that relationship, or whatever it is that’s been eluding you for years?
Past performance is not indicative of future results. You can wake up one day and go about your business when the balance tips and you get that thing you pursued and wished for the most.
The catch is that you must have been actively laboring after it, paying your dues, preparing yourself for when lady fortuna comes up to you with her Cornucopia and gives it to you.
It’s always a good thing to remember while on the search is that fortune favors the bold, the brave, and the well prepared. But… past performance is not indicative of future results, yet still. Take note of the heroes of Greek mythology and learn your lessons.
The Gods are capricious and they are cruel to those who affront them with the expectation of receiving their precious gifts without much groveling, and sacrifice. And when they grant a prayer, you better be grateful and not expect it to be granted exactly as you wanted it, because that rarely happens. And you had better not think that those gifts of the Gods will not be taken away or even cursed if you so foolishly dared to take them for granted.
You have to work on pleasing the Gods with your efforts and sacrifices, and then honor them with your gratitude and complete lack of expectations. Merit has absolutely nothing to do with it. The Greek Gods do not cater to the whims and wishes of mere mortals.
You struck gold? Amazing, now don’t go about thinking that you’re going to hit a new vein every time you strike a rock. You did do well on your last exam? It will not mean anything if you do not prepare for the next one. Climbed to the top of a mountain? Outstanding, but you can still break your neck at the basecamp of the next one.
Past performance is not indicative of future results. Stay in the present and don’t rest on your laurels, for those who made that fatal mistake was mercilessly punished.
But it’s also the same principle for the flip side of the coin. What if nothing ever works, no matter how many dues you pay, hours you put into the work, all the sacrifice, the time wasted, and none of that ever pays off? Same thing my friend. Past performance is not indicative of future results.
In his famous book Atomic Habits, James Clear explains that effort and preparation follow the exponential function of compounding interest. When you think everything that you are doing is just being thrown into the abyss, it’s actually compounding interest over time in what James Clear calls ‘the valley of latent potential.’ That’s when patience really pays off because, over a long enough time span, your results will leapfrog into taller and taller heights to create the most coveted hockey stick shape that defines the accomplishments of every “overnight success.”
So, yes, past performance is not indicative of future results and if you’re on the right path, then be patient and keep preparing for your moment under the sun.
Past performance is not indicative of future results but is also a recipe or rather the antidote to Time Travel with your emotions. Don’t get stuck in the past whether good or bad, because you cannot influence anything beyond your present moment. The past cannot harm or help you whether you kept the company of either angels or demons. In the same way, the future cannot match your expectations either good or bad.
Absolutely, reputation counts for a lot in this world, and people do pay attention to your track record, but it can all so easily go up in flames in a flash if you do not stay on guard and protect it with your life.
Don’t let anyone tell you that things good or bad will remain the same forever or that you cannot reverse everything in your life and chart a different course at any point in your journey.
The winds drive your sails but your hand controls the helm at every moment.
So, you go about your business today and stay vigilant. Keep in mind forever and always that past performance is not indicative of future results.
This is not investment advice.
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