JMF Capstone Wealth ManagementCan past performance predict future performance? – JMF Capstone Wealth Management https://www.jmfcapstone.com An Alabama registered investment advisor Fri, 21 Nov 2025 19:30:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Can past performance predict future performance? https://www.jmfcapstone.com/2014/06/09/can-past-performance-predict-future-performance/ https://www.jmfcapstone.com/2014/06/09/can-past-performance-predict-future-performance/#respond Mon, 09 Jun 2014 18:23:01 +0000 http://evolvemypractice.com/?p=1006 Most investors are well aware of the SEC’s warning that past performance isn’t an indicator of future performance. That warning often leads to questions like: “If past performance isn’t predictive, why do you believe that the past outperformance of value stocks over growth stocks and small stocks over large stocks is predictive?” The answer lies...

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]]> Most investors are well aware of the SEC’s warning that past performance isn’t an indicator of future performance. That warning often leads to questions like: “If past performance isn’t predictive, why do you believe that the past outperformance of value stocks over growth stocks and small stocks over large stocks is predictive?” The answer lies in understanding two key points.

First, the SEC’s warning relates directly to the performance of actively managed mutual funds. The warning is required because an overwhelming body of evidence demonstrates that for these funds even long periods of outperformance aren’t predictive — while some funds do outperform, it’s no more than is randomly expected.

Read the rest of the article on CBS MoneyWatch.

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