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Past Returns Don't Guarantee Future Performance

Dalal Street Investment Journal

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December 07, 2020

It is quite common to see investors picking funds off-the-shelf solely on the basis of their past performance.

Past Returns Don't Guarantee Future Performance

Hemant Rustagi

Chief Executive Officer, Wiseinvest Pvt Ltd.

This applies to both equities as well as debt funds. The general belief is that best performing funds can’t go wrong and are most likely to replicate their past performance even in the future. The reality, however, is that mutual funds offer a variety of funds for investing in both equity as well as the debt market. For example, equity funds take a varying degree of exposure to different segments of the market i.e. large, mid, and small-cap stocks.

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