The 34% Return I’m Glad I Missed

Last February, just before I retired, I was wrestling with how to generate my retirement income. I flirted with the idea of moving 25% of my portfolio into a Vanguard UK equity income fund. I thought deeply about it—the fund historically yields above 4%, and combined with an annuity I was considering, it would have nicely solved my paycheck dilemma.

Eventually I decided against it, mainly because of the concentration risk. Betting that heavily on a single economy felt like too many eggs in one basket. I kept my small 2% position in the fund and maintained my globally diversified portfolio instead.

I can’t help but notice that UK fund has been my portfolio’s standout performer over the last year—trailing 12-month returns of 34.1%. Meanwhile, the 25% I didn’t reallocate stayed in a boring global mix that returned about 12%.

It’s a classic case of “the one that got away.” Watching a fund I almost bought climb 34% while my diversified holdings plodded along is enough to make any retiree’s heart sink just a little. I wouldn’t be human if I didn’t admit that.

But looking at this strategically, my decision was actually sound risk management—and I have no regrets.

In investing, it’s tempting to judge decisions by their results rather than the reasoning behind them. A 34% return would have been fantastic, but it doesn’t retroactively make a concentrated bet “safe.” If I’d moved 25% of my portfolio into a single-country fund and the economy had tanked due to unforeseen political or economic shocks, I’d be calling that same decision reckless.

I didn’t miss a “sure thing”—I avoided a significant risk. The fact that the risk didn’t materialize this time doesn’t mean it wasn’t there. Choosing stability over speculation is the cornerstone of retirement planning.

More importantly, the experience has strengthened my confidence. Every time I’m tempted to second-guess myself when I see a hot performer, I can now ask: “Am I judging by outcome or by process?” That question alone is worth more than the 22 percentage points I “left on the table.”

No regrets—just validation that my decision-making process is sound, even when the outcomes don’t prove it…but I have to say, it’s still rather annoying.