THESE days, the average investor relies on fund performance data to evaluate, buy or sell unit trust funds. He may scrutinise his funds ranking on Lipper, or the Standard & Poors fund performance data. However, he may not be aware that this may lead him to make unwise investment decisions.
When selecting an appropriate fund, many investors are unsure of how to select a fund tailored to their investment needs. Many investors fall into the trap of buying into a fund solely based on its past performance. They assume that if the fund has done well, it will continue to earn the same amount of income distribution or returns every year.