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Using a weighted score based on one-year total return, five-year total return, and five-year Sharpe ratios (a risk-adjusted measure of performance), we chose funds that outperformed their peers in core investment specialties such as: global equities, Europe, Japan, U.S., small companies, and more.
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We chose funding as the key (binary) outcome, rather than continuous outcomes such as scores because funding is what matters most to applicants.
Similarly, while respondents from all professional affiliations chose funding issues as most important in the first round, they suggested 98 additional items, which formed the basis for the extension of the list of causes in the second round.
The stakes are high for an investor choosing funds in volatile times.
After all, very few investors were choosing funds according to after-tax performance.
So if providers of other people's money choose funds wisely, there is not much for them to complain about.
Keep in mind, though, that Value Line -- like Morningstar -- does not recommend that investors choose funds solely because of their ratings.
Money Observer has been my primary teacher and I did fairly well in choosing funds until the last boom.
The investment implication of these results depends on whether you choose funds on the basis of recent returns.
One explanation is the "hand-holding principle"; choosing funds is tricky and clients feel cautious about doing it on their own.
Investors who choose funds based on bull-market performance might overlook those that periodically take huge cash positions when their managers feel stocks are overvalued.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com