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No. of Recommendations: 5
I read about this in the wall street journal from one of my favorite writers, Jason Zweig. It’s a theory called time-period dependency. At the end of February, 40 mutual funds, and 59 ETFs, had returns over 100%. The reason is that the 34% losses that occurred in early 2020, do not show up in trailing 12 months returns. The returns assume you bought before the market opened on April 1st, and held continuously through March 31st, not buying or selling anything. People don’t invest like that.
In any period, once a crash drops off the statistics, returns look much better.

This shows up in other areas as well. The CPI actually fell 1% from February through May 2020. That will distort year over year comparisons, and could easily lead to 3% inflation.
Then the brokerages will be out selling inflation hedges like gold.

Other indicators could be similarly warped: Personal consumption, retail sales, construction spending, corporate earnings, and GDP.
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