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"I picked a hot car, and if you're locked into a hot car, you're doomed".
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Either they work for banks (and try to flog their own firm's products), or they are paid commission by the fund-management firm rather than by the client and the higher a fund's fees, the greater the incentive to sell it.The other problem is a belief that investors can do better than the index by picking a hot fund: money for old hope.
Spotting promising fallen angels is a more rewarding endeavor than picking a hot initial public offering that may fizzle once the novelty has worn off.
Let's pick a hot topic these days — say, replacement refs in the National Football League blowing call after call and game after game, making the sport almost unwatchable.
Anybody could pick a hot stock;say, Home Depot build an "index" around it, call it the Home Center Index;and discover that the index has beaten the pants off the Dow industrials over the past decade.
"You need to pick a hot beat, one of the top five records at the moment.
A new television commercial opens with up-tempo symphonic music as a stunning Japanese woman strolls down a Tokyo street on the arm of a disheveled American man, who sings operatically: "I picked up a hot supermodel in Japanese.
We are driving home from the park, I've just picked up a hot coffee from the drive-thru, all the kids fall asleep at the same time in the back seat, "Welcome to Paradise" comes on the radio, and I turn up the car stereo loud, but not so loud that it might wake the kids up (maybe 4 volume bars on the stereo display... nah, let's live a little... roll the dice and turn it up to 5).
So if this sounds like fun, take my advice, pick a nice hot day to try it out.
For instance, they stacked the cards against themselves by purposefully picking a very hot year to start the analysis and a cool year to terminate the study (1998 and 2012, respectively).
If you and your ex loved going to the Italian place down the street on date night, pick a new hot spot for your pasta cravings.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com