It is easy for the common investor to get carried away by the agent telling him about the “best performing fund”. The question to ask is “How will the fund manager maintain the same rate or a similar track”. The answer is we cannot. Check out the article on risk and performance. See the amount of risk the fund manager is taking on the portfolio. Afterall whether you are an institutional investor or a lay investor, the most important question to ask is “What is my return..and how many sleepless nights did I spend to get this return”. In technical parlance this is called “risk adjusted return”. RaR is more important than just R.

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