As another year draws to a close, many of us investors naturally reflect on what worked, what did not, and what lessons the markets offered. Year-end is also when portfolios are reviewed, rankings are checked, and plans for the coming year are drawn up. Yet this is precisely the time when we often fall into a familiar trap: confusing search with research.
In an era of abundant data and instant access to information, investing has undoubtedly become easier. However, ease of access does not always translate into better judgment. Platforms today allow us to filter, sort, and rank schemes within seconds. While this democratisation of data is a positive development, it has also blurred an important distinction. What we often label as “research” is, in reality, structured searching.
As we investors prepare for 2026, revisiting this distinction becomes more important than ever.
The ‘Search’ Trap: Filtering is Not Thinking
Search is the act of filtering or sorting data to identify outcomes that appear attractive on the surface. In investing, this typically involves ranking funds based on:
- Highest one-year returns
- Top performers over three, five, or ten years
With modern tools, this process is quick and reassuring. We can sort by last year’s returns, select the top fund, and feel confident that we have identified a winner. Some of us go a step further and check longer trailing periods to reinforce that decision.
However, this remains search.
Search answers the question: What performed well in the past?
It does not answer: Why did it perform, what risks were taken, and how repeatable is that outcome?
True Research: Decoding the ‘Why’ Behind the Returns
Research is a structured process focused on understanding behaviour, process, risks, and suitability. It goes beyond outcomes and seeks to identify drivers.
Research attempts to answer questions such as:
- What investment philosophy does the fund follow?
- How does it behave across different market cycles?
- What risks does it consciously take or avoid?
- How does it fit within our overall portfolio?
- What kind of investor experience should we realistically expect?
Research is forward-looking, even though it relies on historical data. It looks for patterns of behaviour rather than isolated outcomes.
The Long-Term Trap: Why 5-Year Returns Can Lie
A common belief among us investors is that sorting funds by longer return periods automatically converts search into research. While longer timeframes may reduce short-term noise, they do not eliminate bias.
When an asset class performs strongly for one to three years, its trailing five or seven-year returns often start looking impressive by default. Recent performance disproportionately influences trailing numbers, particularly in volatile segments such as thematic strategies or commodities.
As a result, long-term return tables often conceal the intermittent pain we would have experienced along the way.
Starting and Ending Dates Matter More Than We Admit
Trailing returns are highly sensitive to starting and ending dates. A comparison made at one point in time can look very different just months later.
For example, comparing gold and equity market returns in September 2024 would have led to very different conclusions than the same comparison in December 2025. Gold performed exceptionally well during the interim period, while equities remained flat to negative over much of the last fifteen months. The narrative shifted not because long-term fundamentals changed overnight, but because the observation window changed.
This also explains the recurring narrative that precious metals such as gold or silver have beaten equities over the long term based on trailing return comparisons. Such conclusions often ignore long phases when precious metals delivered negligible or negative real returns. Historically, gold and silver have experienced extended periods of stagnation that tested investor patience.
Trailing tables hide these barren phases. Research forces a more uncomfortable question: Would we investors have stayed invested during those long periods of disappointment?
As we enter 2026, this serves as a reminder that trailing returns often reflect timing of observation rather than enduring superiority.
Returns Without the Journey Are Incomplete
We investors experience markets sequentially, not as a single compounded number. Two funds may deliver identical ten-year returns, yet the journey to reach those returns could be vastly different.
One may grow steadily with manageable drawdowns, while the other may suffer deep declines, long periods of stagnation, followed by sharp recoveries. Numerically, both look similar. Behaviourally and practically, they are not.
Search focuses on outcomes. Research examines the journey.
Correlation, Portfolio Chemistry, and Diversification
Search evaluates schemes in isolation. Research evaluates interaction.
A fund that looks unattractive on its own may add meaningful value when combined with others due to low correlation. Thoughtful diversification can reduce volatility and improve the overall investor experience.
Much like chemistry, the interaction between components matters more than individual brilliance. Two average-looking funds can together create a more resilient portfolio than a collection of top-ranked schemes moving in the same direction.
The Role of Financial Advisors in 2026
As markets evolve and narratives shift rapidly, expecting all of us investors to independently conduct deep research across cycles, correlations, and behavioural risks may be unrealistic.
A good financial advisor adds value not by chasing top performers, but by helping us interpret data, build balanced portfolios, and remain disciplined across market phases. As we plan for 2026, the role of advice becomes more important, not less.
Conclusion: A Better Resolution for 2026
Search and research are not substitutes. Search helps narrow choices; research helps make decisions.
As we investors step into 2026, the resolution should not be to find the next top-performing fund, but to improve the quality of our decision-making. That means focusing on process, journey, correlation, and discipline, not just trailing returns.
In investing, better outcomes often begin with better questions. Recognising the difference between search and research is a powerful place to start.
About the author: Manuj Jain is a CFA charterholder and Co-Founder at ValueMetrics Technologies.