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History Is BunkFund A grew 15 percent a year. Fund B grew 3 percent. Don't be a sucker and buy Fund A.
Updated Wednesday, Feb. 21, 2007, at 7:24 AM ETBrowse the entire Bad Advice series here.
The bottom line: Although common sense suggests that scrutinizing past performance should enable you to select funds that will perform well, it usually won't. There are some instances in which past performance is a good predictor of future performance: with index funds, for example, or in cases in which a fund's good results are due to low costs. In most cases, however, past performance is irrelevant.
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