I was golfing with a friend of mine a couple of Friday's ago. At the 19th hole, we got talking investments, which led us to the PH&N Bond Fund. He's owned the fund for years and has been very happy with it. When we were discussing performance, I pointed out how well it had been doing to which he said with a scowl, “not lately”.

I was surprised by his comment and body language. I explained that the bond market has been very weak so far this year and that rising interest rates made it tough for any bond portfolio to provide positive returns. In this context, the PH&N fund had held up pretty well. Neither of us wanted to talk about bonds on a Friday evening, so we quickly moved on to discussing Michelle Wie.

Reflecting back, however, this brief conversation reminded me how unrealistic investor expectations can be sometimes. We have been experiencing terrific markets in Canada over the last 3 years. It's true that the 2nd quarter wasn't so hot. And certainly bond returns have moderated, but only after experiencing a 20+ year bull market, which had few interruptions along the way.

I'm continually amazed by investors' short-term thinking. I'm not sure how we change that, but one thing I often point out is that even the most successful professional money managers have bad patches, which might last a few quarters, a year or a few years. Think of Irwin Michael at ABC ... he wasn't always riding high. Bill Kanko had some dry spells in his Trimark days. Jerry Javasky, Francis Chou, Kim Shannon ... go down the list.

Good markets are made up of strong and weak periods and even superstar managers have slumps (which are part of their long-term batting average). To be a successful investor, our expectations have to be appropriate. Without that, we're likely to make some regrettable decisions (read: disastrous market timing, performance chasing, unwarranted risk taking).

As for Michelle Wie, I think people are making way too much of the fact that she hasn't won a tournament yet (she finished second in Germany that weekend). She's only 16 years old and yet is in the hunt almost every time she tees it up on the LPGA, especially in the most important tournaments. It's time to chill out and enjoy watching this great young golfer.