Chapter 12
Investment Historic Performance
To predict the future understand the past
‘Those who cannot remember the past are condemned to repeat it.’
George Santayana
This chapter will review assets’ historic performance. Formulating an investment strategy requires investing in assets based on expectations on how they are likely to perform in the future. To predict future performance, first understand the past.
The best guide to the future is history. It provides probabilities. If an investment behaved in a certain way 80% of the time, it is fair to assume it is likely to continue doing so. The challenge is using the right past since investments behave differently during different pasts.
The objectives of this chapter are exploring and demonstrating ...
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