The Folly of Foregone Futures: Why Past Performance Is No Guide to Tomorrow's Market The financial industry has an unhealthy fixation on what has been, rather than a forward looking gaze at what may be.
Despite the importance of risk management, many investors continue to base their decisions on past performance. This article serves as a timely reminder that relying on historical returns is flawed and hazardous.
Relying on past performance ignores the unique confluence of factors that fueled extraordinary equity returns in the post 2008 era: zero interest rate policy (ZIRP), quantitative easing, cheap energy, and aggressive corporate debt issuance used for share buybacks.