Question

Do you think looking at the historical performance of a business is more important than the future vision of the company when investing?

Answer 1

Past historical performance of the business does not guarantee future results. This appears to be a reinvented version of the investment. But investors seem to think differently. Mutual funds were selected on the basis of historical performance. Investors said that without looking at historical returns.

Your investment strategy can easily have an unexpected impact on a company's historical performance. In my view, "annualized rates of return appear to bring about many changes in investment history." Creates misleading effects for investors.

If you are a long-term investor, it seems to you that although most financial reports represent a historical past, almost all the value of the business is in the future.

Each time you disclose a mutual fund prospectus or other type of investment, you can jump to the phrase that says something like: "Historical gains guarantee future performance." That would seem to be hiding everything from direct funds in the accounts managed by the individual investors to the rich.