Most people evaluate money managers from their past returns, but it is easy to get into trouble doing this. You can run into several problems including lower future returns from too much cash in successful funds, taxes on past gains in non-retirement accounts, high transactions costs from buying and selling, and buying investments at the wrong times.

What then can and should you do? We can learn from the academic financial research:

• You can’t predict performance: managers with past higher returns on average do not repeat their outstanding returns.
• Investments with extraordinary gains can also have extraordinary losses.
• Buying and selling costs are important.

A buy-and-hold approach works particularly well, particularly if you do not need to cash your investments in anytime soon.

For a fuller discussion of this topic, go to:
http://blog.lib.umn.edu/learning/financialplanning.

If you still have questions in this area, please contact us as described below.

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Mark Fischer, Certified Financial Planner
Fischer on Finance
7301 Ohms Lane, Suite 365
Edina, MN 55439
Phone: 952-881-4696
Fax: 952-881-4534

Securities offered through Multi-Financial Securities Corporation, member FINRA, SIPC. Fischer on Finance, LLC is not affiliated with Multi-Financial Securities Corporation.

All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.