http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm Personal Financial Articles Fri, 21 Nov 2008 20:46:23 +0000 http://wordpress.org/?v=2.3.3 http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-21403 The Credit & Credit Card Blog » Blog Archive » festival of investing Fri, 13 Jul 2007 14:39:34 +0000 http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-21403 [...] Larry Russell presents How to lie with statistics: Investment performance charts ? A Tip from The Skilled Investor posted at THE SKILLED INVESTOR Blog, saying, “Historical investment performance charts for investment funds might be historically accurate. However, their presentation in advertising, on line, and in printed materials can amount to lies from several perspectives. Performance charts are designed to lure gullible individual investors with an implied promise that superior past performance will continue. The financial research literature tells us clearly that on average this is a promise that cannot be kept. In other words, historical performance charts are a veiled lie. They may report factual information, but their purpose is to deceive. Here is why…” [...] […] Larry Russell presents How to lie with statistics: Investment performance charts ? A Tip from The Skilled Investor posted at THE SKILLED INVESTOR Blog, saying, “Historical investment performance charts for investment funds might be historically accurate. However, their presentation in advertising, on line, and in printed materials can amount to lies from several perspectives. Performance charts are designed to lure gullible individual investors with an implied promise that superior past performance will continue. The financial research literature tells us clearly that on average this is a promise that cannot be kept. In other words, historical performance charts are a veiled lie. They may report factual information, but their purpose is to deceive. Here is why…” […]

]]> http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-21401 My Debt Relief Plan » carnival of wealth building ideas Fri, 13 Jul 2007 14:30:30 +0000 http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-21401 [...] Larry Russell presents How to lie with statistics: Investment performance charts ? A Tip from The Skilled Investor posted at THE SKILLED INVESTOR Blog, saying, “Historical investment performance charts for investment funds might be historically accurate. However, their presentation in advertising, on line, and in printed materials can amount to lies from several perspectives. Performance charts are designed to lure gullible individual investors with an implied promise that superior past performance will continue. The financial research literature tells us clearly that on average this is a promise that cannot be kept. In other words, historical performance charts are a veiled lie. They may report factual information, but their purpose is to deceive. Here is why…” [...] […] Larry Russell presents How to lie with statistics: Investment performance charts ? A Tip from The Skilled Investor posted at THE SKILLED INVESTOR Blog, saying, “Historical investment performance charts for investment funds might be historically accurate. However, their presentation in advertising, on line, and in printed materials can amount to lies from several perspectives. Performance charts are designed to lure gullible individual investors with an implied promise that superior past performance will continue. The financial research literature tells us clearly that on average this is a promise that cannot be kept. In other words, historical performance charts are a veiled lie. They may report factual information, but their purpose is to deceive. Here is why…” […]

]]> http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-19028 The Smart Money Report » Blog Archive » How to lie with statistics Thu, 05 Jul 2007 10:07:01 +0000 http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-19028 [...] The Skilled Investor makes a very important point about how mutual funds and investment advisors manipulate data to demonstrate superior performance. But there is one group who refuses to play the game: “The way(s) you mitigate against it are several. One, you never — in our view — never promote performance. You just never run a performance ad. I think that is endemic to our business, and I think it’s a shame for our industry. When you read a performance ad, there is an assumption that the strong performance will continue. And that is not necessarily true. The second thing is … when you call Vanguard to talk about our funds, or when you read our literature, you won’t find a Morningstar Star Rating. … The third way to mitigate is with communication. When you read our annual reports after a terrific year, you can be sure that we will tell investors, “please don’t assume that this will continue.” … Finally, you also have to be willing and able to close a fund and have a cooling off period. That’s bad for business, and it always inspires some nasty letters. But it’s how you build a performance track record. I have never once regretted closing a fund. At the end of the day, firms that promote performance do so at their own peril.” [...] […] The Skilled Investor makes a very important point about how mutual funds and investment advisors manipulate data to demonstrate superior performance. But there is one group who refuses to play the game: “The way(s) you mitigate against it are several. One, you never — in our view — never promote performance. You just never run a performance ad. I think that is endemic to our business, and I think it’s a shame for our industry. When you read a performance ad, there is an assumption that the strong performance will continue. And that is not necessarily true. The second thing is … when you call Vanguard to talk about our funds, or when you read our literature, you won’t find a Morningstar Star Rating. … The third way to mitigate is with communication. When you read our annual reports after a terrific year, you can be sure that we will tell investors, “please don’t assume that this will continue.” … Finally, you also have to be willing and able to close a fund and have a cooling off period. That’s bad for business, and it always inspires some nasty letters. But it’s how you build a performance track record. I have never once regretted closing a fund. At the end of the day, firms that promote performance do so at their own peril.” […]

]]> http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-17429 carnival of struggling bumbling newbies - June 30, 2007 : SuccessPart2.Com Sat, 30 Jun 2007 18:53:57 +0000 http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-17429 [...] Larry Russell presents How to lie with statistics: Investment performance charts ? A Tip from The Skilled Investor posted at THE SKILLED INVESTOR Blog, saying, “Historical investment performance charts for investment funds might be historically accurate. However, their presentation in advertising, on line, and in printed materials can amount to lies from several perspectives. Performance charts are designed to lure gullible individual investors with an implied promise that superior past performance will continue. The financial research literature tells us clearly that on average this is a promise that cannot be kept. In other words, historical performance charts are a veiled lie. They may report factual information, but their purpose is to deceive. Here is why…” [...] […] Larry Russell presents How to lie with statistics: Investment performance charts ? A Tip from The Skilled Investor posted at THE SKILLED INVESTOR Blog, saying, “Historical investment performance charts for investment funds might be historically accurate. However, their presentation in advertising, on line, and in printed materials can amount to lies from several perspectives. Performance charts are designed to lure gullible individual investors with an implied promise that superior past performance will continue. The financial research literature tells us clearly that on average this is a promise that cannot be kept. In other words, historical performance charts are a veiled lie. They may report factual information, but their purpose is to deceive. Here is why…” […]

]]> http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-16322 John Blair Tue, 26 Jun 2007 12:28:51 +0000 http://www.theskilledinvestor.com/wp/how-to-lie-with-statistics-investment-performance-charts-113.htm#comment-16322 I have been working with Vanguard for about 10 years and we have done well. My only problems have been my misunderstanding about when a year ends relative to long term gains, the lack of comment on which sectors are more reasonable priced by the market. On the other side performance is good, working with the investor is superb and their web side is a treasury of facts, albeit with out guidance and analysis. Vanguard has worked well for my family. Sincerely, John Blair , and their workings, i.e. I have been working with Vanguard for about 10 years and we have done well. My only problems have been my misunderstanding about when a year ends relative to long term gains, the lack of comment on which sectors are more reasonable priced by the market. On the other side performance is good, working with the investor is superb and their web side is a treasury of facts, albeit with out guidance and analysis.
Vanguard has worked well for my family.
Sincerely,
John Blair , and their workings, i.e.

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