Six Reasons to Not Take Returns at Face Value
Stock or fund returns might not tell the whole story.
We all know that past returns are not indicative of future results. But past returns may not be indicative of true past results, either.
Come again? Surely nothing's more straightforward than a return calculation. Well, the more time you spend analyzing returns, the more wrinkles you find. There are dozens of reasons that a stock or fund return might be misleading or not reflect true changes in investor wealth. Some of these effects are small--small enough that you can live a long and peaceful investing life and never think twice about them. Some can be quite large, however.