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Track Record Investing

Merriam Webster Dictionary: Definition of track record- a record of past performance often taken as an indicator of likely future performance.

Can You Count on Track Record Investing?


March 1, 2020

This is the million-dollar question: Because an investment did well in the past, does it mean it will do well in the future? Everyone has heard the disclaimer at the end of a TV commercial that just told you, you should buy their investment, but at the end of the commercial, you hear the famous disclaimer “that future results are not a guarantee.” Why is that? Because they can’t.

Let’s make sure we have a distinction between years and years of historical returns from asset classes vs. a hot stock or fund that has done well in the past few years. Think of all the companies too big to fail but did. Compare that to an entire asset class like the S&P 500 over the decades. There is a big difference between the two.

Don’t get caught up purchasing an investment that has trended pretty good as of late, especially if there is a commission to be had by the financial representative.

So why purchase something that has done well in the past. Is the investor banking on it doing well in the future? Of course, they are. Sounds like speculation and gambling again.

Don't do it! Eliminate Track Record investing in your investment strategy.

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