Some rules were made to be broken. Christine Benz of Morningstar highlights some misleading conventional wisdom.
“It’s possible for a fund to have an unblemished record of positive calendar-year returns but plenty of losses over other 12-month periods,” she says. Benz says it’s more important to watch absolute returns. Underperforming funds aren’t always deadweight so don’t drop a fund just because it’s a had a bad year or two. Benz recommends holding onto a fund as long as it retains its investment thesis.