"Typically, investors are advised to focus on long-term track records when choosing a fund - often five, ten or fifteen years. However, five or ten year performance data do not provide a very good indication of how a fund is likely to perform in coming years. More telling is how a fund has performed quite recently - in the last twelve months or less."
"In a phenomenon known as "persistence of performance," which has been carefully studied by academic researchers in the past decades, funds that have performed well against their peers in recent months tend to continue that out-performance into ensuing months. The trouble is that persistence tends to fade after six to eighteen months."
DAL INVESTMENT COMPANY
Publisher of NoLoad Fund X
Advisor to the Upgrader Funds
Winter 2007
Wall & Co. strategies are designed to capitalize on the short-term persistence of superior performance among leading mutual funds and asset classes. This persistence has been well document in numerous academic studies.
Summary of Studies on Persistence of Performance in Mutual Funds