Return – we chase it, we measure it – daily, monthly, quarterly. We compare investments and investment managers based upon it. Newspapers, radio, television, and now Internet media focus upon it. Like "plastics" in the 1960s movie The Graduate, it is the ONE WORD upon which everyone clings.

Intellectually, most of us understand the correlation between return and risk. Emotionally, the risk side of the equation gets lost. Why, over time, did Fund A outperform Fund B? Generally, (not 100% of the time, but most of the time) it is simply because Manager A took more risk. 

So, when contemplating a move from Fund A to the outperforming Fund B, the question should be, "Do I want to increase my risk, and if so, why?" If we approach investing in this manner, we can avoid chasing the latest "winner." Instead, we can focus upon our long-term strategy for achieving our investment goals.

The best way to measure progress is not by following return, but by measuring how well our current strategy is tracking our longer-term goals. Is my current level of risk  –  given my resources and assumptions about long-term inflation and returns – generating a statistically high probability of success? Would more or less risk improve that probability? If not, stay the course – no matter what the last statement from your brokerage account or 401k reads. If so, then make an adjustment based upon the intellectual understanding that success is all about risk, not the most recent returns.