Chasing returns is ineffective
AGF (the mutual fund company) brought an interesting study to my attention.
Investors are often tempted to jump out of an existing investment in order to buy something that is perceived to be doing better. In other words - chasing short term performance. However, the study cited by AGF indicated that top performing investment managers (top 25%) spent a considerable amount of time in the bottom 10% during a 10 year period. This indicates that "jumping ship" to presumably find better returns elsewhere, may not be an effective investment strategy. A similar study came to the same conclusion here:
