• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

7. Investing in Mutual Funds > Evaluate Short-Term and Long-Term Returns

Evaluate Short-Term and Long-Term Returns

Examine mutual fund long-term returns and risk characteristics to avoid getting burned by funds on a momentary hot streak.

For fund companies, attracting investors is as easy as shooting fish in a barrel. They just advertise recent short-term returns for their best-performing fund and watch fund investors fall for the oldest trick in the mutual fund book. Buying based on short-term performance is a loser’s game, as you buy one fund at the top, and sell it when it falls in order to buy the next hot fund. It’s no wonder so many are soured on investing. But don’t be fooled—buying based on short-term performance isn’t investing, it’s gambling. And like the addict who keeps running back to the lottery ticket window, mutual fund gamblers won’t have much to show for all their efforts. In fact, a recently released Morningstar study shows that short-term mutual fund performance doesn’t predict futur....


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint