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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.

By Henry BlodgetUpdated Wednesday, Feb. 21, 2007, at 7:24 AM ET

Browse the entire Bad Advice series here.

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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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Henry Blodget's book, The Wall Street Self-Defense Manual, was recently published by Atlas Books and Slate. You can buy the book here. You can learn more about it here.
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