An Asterisk Next to the Star
History Does Not Predict Futures
No Predictive Value
In what is a truly sad situation, another study found that while smart people don’t ignore the Surgeon General’s warning about the hazards of smoking cigarettes, they do disregard the SEC’s required warning that accompanies all mutual fund advertising.
Interestingly, the authors did find “that a stronger disclaimer — one that informs investors that high fund returns generally don’t persist (they are often a matter of chance) — would be much more effective.”
The Bottom Line
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