this picking future winners from past performance doesn’t seem to work even when you use a 3-year or 5-year record. A study done by Investment Vision magazine (now Worth) shows the following: if every year between 1981 and 1990 you invested in the fund that had performed the best over the prior 3 years, in the end you would have lagged the S&P 500 by 2.05 percent. If you invested in similar fashion in the funds with the best 5- and 10-year records, you would have beaten the S&P by .88 and 1.02 percent respectively. This would not have made up for the cost of getting in and out of these funds.
