Mirage of the Stock Market: Track Records for Investment Funds Can Be Misleading

In ironing out an investment strategy for managed accounts, a standard procedure is to examine the prior performance of the investment funds. Contrary to popular belief, however, a track record in the financial markets proves nothing of substance. As a case in point, a superior portfolio that outpaces the stock market can be constructed in a systematic fashion as explained in this article. The method adopted here may be viewed as an instance of proof by demonstration.

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How to Compare Investment Funds by Type: Mutual Funds, Hedge Funds, and Index Funds

If you’re like most people, you find yourself taking a greater interest than ever before in the subject of investment planning including the prospects for investment funds. The popular vehicles in the latter category take the form of mutual funds, hedge funds, and index funds.

The main reason for the heightened interest on your part is a growing awareness of the need to take charge of your own financial destiny. With the passage of time, you can see more clearly that you cannot rely on providence alone to take care of the morrow.

For best results, you need to approach the task of investment planning in a systematic way. A good place to start is to evaluate the relative merits of the different types of commercial vehicles.

This article spells out a practical approach to weighing the respective features of managed pools as a launching pad for a sound strategy. The key is to pin down the divergent aspects of mutual funds, hedge funds, and index funds.

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