Just as fund companies tend to exaggerate the level of experience of his youth, call center investment adviser, "Management is often attributed to what the evidence suggests that it is more or less success, with extraordinary talent. As I have said before, the asset high management fees will be worth it, if high rates of return and continue to create. However, production could not be served, while the odds are mostly not worth it (especially the excessive prices pushed adviser funds). To make matters worse, although I admit , in a certain year, two years two-thirds of fund managers beat the market, this figure dropped sharply, with the extended time span.

In fact, the manager's record has been proved to be the worst thing you can do a fund, one of the options. The highest past performance is no guarantee of future results is correct. In addition, past performance is almost a guarantee excellent performance of sub-denomination's future.

If you read the business pages of advertising investment funds, it may be accompanied by a smiling, happy, healthy people a lot, 1,5 and 10 years at the bottom of the. If you are really brave, and has beat the S & P 500 index, which will compare the index with these figures. However, this is only part of the story. First of all, a well-functioning of each fund, and to provide U.S. dollars to face a substantial increase in investment, making it more difficult to overcome these returns. Expressly provided in this notice that they can make the average yield for many years, but also hard to find, it is now 10 times or more of the management? No.

Second, run with dozens or hundreds of huge capital fund complex is one of the true benefits of a point, one of which will be overcome. This means that funds are advocating what is hot nowadays is its silence and exacerbated by the poor performance of the problem. I remember the book in 10 days, the company's choice so that he can be sure you have the correct requirements in order to promote next week. "Hot hand", from the University of Illinois finance professor Joseph Lakonishok through theory tells us that any fund manager for over a year can be expected to continue to beat a maximum of 10 quarters. Lakonishok property, which is the market now, more than any investment ideas. As the fund managers will be the influx of money, funds, asset prices even higher bid. After the performance, beyond the period, if indeed there is a manager in all more likely to not make money, sometimes far below. The key lesson is that you should not be in love with the hot-money ads.

The most should be aware of this phenomenon, herd mentality, it is difficult for any fund managers. From a macro point of view, history has proven. For example, in the early stages of the market in 1990, 'bull, about one-tenth the level of inflows in 1999-2000, the market to flourish. In contrast, outflow of funds in its 2002-2003 peak, when the market is at the bottom. The result is a paper in the form of small investors wealth 4 billion U.S. dollars the stage disappeared. To some extent, the fund industry to continue its misleading advertising, they should be held responsible.

Tags: Chasing, company, Fire, fund, investment adviser, Joseph Lakonishok, Mutual, Performance, Reasons, time span, U.S.