"Awesome
1-year performance", boasts a mutual fund ad. But did they mention that
several of their other mutual funds did not do so well, and that they even
closed some funds for inferior performance?
If a company has enough funds, they are pretty likely to have at least a
couple that are above average. But
knowing in advance which ones will be the winners is the hard part. And funds often find it difficult to perform
above average on a consistent basis. So
be careful not to be the investor who is always chasing last year's winners
only to find that you own this year's losers.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com
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