Comments on: Mutual Fund Managers Are Happy to Leave 2002 Behind!

By: LAMoneyGuy

LAMoneyGuy — Thu, 01 Feb 2007 23:58:34 +0000

Anything that does not include bear market performance can be very misleading, if you are using historical numbers for past performance. We all know that value managers would have looked poorly at the end of the nineties, but beat the pants off of growth managers in the three years to start the decade. I would use nothing short of 10 year numbers.

By: JLP

JLP — Thu, 01 Feb 2007 14:51:16 +0000

crsandus,

EXCELLENT point!

I don’t see the value of 5-year numbers. They are too short-term in my opinion.

By: crsandus

crsandus — Thu, 01 Feb 2007 14:39:01 +0000

While dropping 2002 out of the 5 year range is great and all, I am more interested in when 2003 gets dropped also. A major reason for the 14.46% return (which 2002 dropped) is because of the massive gain made in 2003, which of course was partly due to the big drop in 2002. If you drop out 2002 AND 2003, the average return becomes ironically ~10-11% which is what everyone says the market has returned since 192X or so.

By: Clever Dude

Clever Dude — Thu, 01 Feb 2007 14:07:23 +0000

Thank you for bringing this up. I always go by the 10 year returns (or more if available), but I wouldn’t have thought about how dropping 2002 would affect the numbers.

However, historical returns are only part of the picture (as you’re aware), and any investor must do due diligence when picking their investments anyway.

By: JLP

JLP — Thu, 01 Feb 2007 04:41:18 +0000

Bill,

Yes, I read the WSJ article and normally I do post a source when I reference it. However, I didn’t quote the article nor did I use their numbers.

By: Bill

Bill — Thu, 01 Feb 2007 04:34:16 +0000

Shouldn’t you give credit to the Wall Street Journal for this?