These Funds' Strong Star Ratings Don't Tell the Whole Story
Despite their rosy returns during the recent rally, these bull-market stars posted big losses in 2008.
Stocks have been volatile this summer, as investors have worried about geopolitical tensions in the Middle East and Eastern Europe, as well as the direction of interest rates and equity-market valuations.
But as stocks have settled back into a comfortable late-summer groove, I'd say that the biggest threat to most investors' portfolios today is complacency--the tendency to believe that the status quo, especially if it's positive, will persist into the future. As the bear market recedes further and further into the distance, investors may be inclined to forget the merits of risk controls and diversification while front-burnering returns enhancement.
Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.