How important is an advisor’s past trading performance?
As advisors and prospectuses are required to state, past performance is no guarantee of future results. An advisor who has performed well in the past may perform poorly in the future. And it is possible that someone who has performed poorly may begin to perform well. This notwithstanding, in any endeavor some individuals are obviously better at what they do than others and a track record is at least an indication of past performance. In addition, a track record can provide other valuable information about an advisor’s experience, approach to trading, and amount of money under management. You’ll also want to note whether performance data included in the disclosure document refers to actual trading results or to “hypothetical” or “simulated” results.
