Mutual Fund Shell Game

Just like ‘street hustlers’ who take money from unsuspecting people, mutual funds have developed a system that is very much the same.  Giving people the ‘illusion’ that there are funds and managers out there with Clairvoyance, they deceptively use the law of large numbers (with a big enough sampling, even flipping a coin which has 2 possible outcomes, 1 person will flip a head 9 or 10 times in a row—are they champion coin flippers or just a statistical possibility) they create the illusion that some managers are better than others.  Investors believe and are taught that by looking at ‘past performance’ it will give us some indication of how well they have done and will do in the future.  BEWARE!  Nothing could be further from the truth and an old gambling con used by gambling gurus is very similar to what we find in the mutual fund market today.