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NEW YORK (AP) - In investing, like sports, the numbers can be compelling but don't always tell the whole story. Athletes and stock pickers alike can hit cold streaks or lose their rhythm when conditions change, so a solid long-term record is what really burnishes a reputation. Rookie funds are at something of a disadvantage, knowing that investors like to see a history of performance, so many of these funds will calculate what their results would have been had they been around longer. But while the numbers that come from so-called backtesting can be helpful, investors should remember there is a difference between a scrimmage and a regular game.
"It isn't the same thing as real results," said Russel Kinnel, a mutual fund analyst at investment research provider Morningstar Inc. "I think you certainly have to keep it in mind when it is backtested," he said of investors considering young funds.
And even if everyone agreed backtested figures carried as much weight as a log of a fund's actual performance, investors would be wise to remember the boilerplate statement that's as much a part of mutual fund ads as tags on new mattresses or FBI warnings on movies: Past performance doesn't guarantee future results.
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