Past performance in particular can sound a plausible basis upon which to form an opinion. This is because we are programmed to recognize patterns in nature and to extrapolate what we believe we have observed. However, studies have shown that there is a high degree of randomness in relative investment returns and that to be statistically significant, a performance record should be intact for nearly 15 years. Few investors meet this criterion. Fewer still meet this requirement and have not experienced other changes which have a direct impact on future performance, such as staff turnover or growth in assets under management which can affect portfolio construction. Consequently, we strongly believe that — considered in isolation – past performance is a poor basis for assessing investment skill.
Ithaka gave you the marvelous journey.
Without her you would not have set out.
Read more: http://www.thereformedbroker.com/2014/02/17/the-best-and-worst-thing-about-investing/#ixzz2uCOyFn8G