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I like John Bogles „reversion to the mean“ analogy. What goes up, comes down. Look at past performance of Mutual Funds. If they peaked and you buy it, you can
by sdze 4y ago
I like John Bogles „reversion to the mean“ analogy. What goes up, comes down.
Look at past performance of Mutual Funds. If they peaked and you buy it, you can almost be 100% sure, that it will fall.
- pharmakom 4y agoIf you buy at the peak you will lose money by definition…
- projektfu 4y agoBetter put, since a peak can't be predicted, is that a fund with outsize performance last year will likely underperform this year. I remember Janus' ads running a victory lap about one fund with a >100% return in 2000, only to have ads talking about how to stay strong and deal with "uncertainty" or something after the crash.