“Past performance is not a reliable guide to future performance”. It’s the best known piece of small print ever written. We all know it off by heart from hearing it on the tv and radio. But that doesn’t stop people looking at past performance and using it to make decisions on what funds they invest in. Let’s have a look at what this sentence means.
Mo Salah joined Liverpool in 2017 and is in his 4th season playing for Liverpool. His premier league scoring statistics are:
If I was buying Mo Salah for my fantasy football league team, I wouldn’t get any points for any of the 16 goals that he has scored for Liverpool so far this season. I will also pay more for him than I would for any other player. There is no guarantee that he will score another goal or he could go on a barren spell but I know that based on his record over the last 3 seasons and so far this year, it is likely that he will continue to score goals.
Think of the same when you are picking an investment fund.
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