Review of the Past Performance is Not the Main Benchmark
July 21, 2010
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Posted by admin
The factors that generally used by the society are usually wrong in determining the preferred investment. Therefore needed perspective or better considering for choosing the right mutual funds for your financial goals. Past performance is not everything, when you examine the behavior of the individuals in selecting Mutual Funds, most of them are seeing one factor only that is past performance. When a mutual fund has a good level of performance on last year, then people will tend to choose that.
Economic theory has played an important role for making a decision. Economic theory is not a certain thing and can be predicted. In an explanation where a case is caused by the existence of other things, it will be very different to your effort to predict what will happen in the future. Why is this thing can not be held? Today’s economic conditions will be very different from the situation in the past. Possibly, different inflation rates, different taxes, probably a different rate of return or different political situation.
Because of many different indications in the matter of economic, political and social, how can we expect the same return rate as last year? Obviously the answer is that you can not predict the future return rates based on the past performance. Therefore it is not right when you decide to choose an investment only because its last year’s performance is very good.
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Categories: Financial Information
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Tags: Economic theory, Financial Investment, Money Investment, mutual funds, stock market
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