Does It Make Sense To Invest In Winners?

The common tendency among those who invest in mutual funds is to simply look at some data and pick out the one that has been at the top, assuming that a fund which is performing well today will continue to do so in the future as well. There is something terribly wrong with such a strategy if you want your mutual fund to create wealth over the long term. The article explains the factors that must be taken into consideration prior to choosing the winner 

Investors would have noticed the fact that, of late, the equity markets have been displaying good momentum. This is primarily due to the state elections results and expectation of continuity of the present government at the centre along with the return of foreign institutional investors (FIIs) and the US Federal Reserve turning dovish with hopes of beginning a rate cut cycle from March 2024. Given that mutual funds are closely linked to the equity markets, the returns offered by them have witnessed a spike too.