Buy the Best, Perform the Worst
And vice versa.
Right Idea, Wrong Time
Earlier this week, for an upcoming feature on investor returns in Morningstar Magazine, I participated in a discussion with Morningstar's Russ Kinnel and Rayliant Global Advisors' Jason Hsu. The latter presented a counter-intuitive argument: When buying value funds, investors should seek funds with bad recent performance.
Hsu is correct, but the idea takes some unpacking.