Beyond the Numbers: Getting to Know a Manager
Performance statistics are probably the single most scrutinized feature of any stock mutual fund.
These figures are, of course, important indicators of how well a portfolio manager has performed in the past. As such, they can serve as useful flags of a possibly good manager or a possibly bad manager.
But the question facing any prospective investor is: Will a stock fund manager with good past performance be able to sustain his or her track record?
Good past performance can be the result of sheer luck, or it can be due to a well-thought-out approach that is consistently applied. If it was due to luck, chances are the good performance will not continue. But if the performance was due to a consistent approach, there is at least the possibility of good performance continuing.
That means that at some point you have to look beyond the statistics to see who made the performance happen, so you can form a judgment about future performance. You need to examine a fund manager's approach.
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