past performance does not indicate future performance
Yes, obvious statement is obvious.
Pretend for a moment that we applied this statement to Olympic gold medalists. The statement is not needed because if past performance guaranteed future performance then why hold the Olympics?
why do fund companies bother to publish the past performance of their funds?
If a fund increased by 300% in the past year then I want to know about it.
That fund is either heavily vested in a hot market which I think can climb higher or it has peaked and I should avoid it at all costs.
Likewise if a fund has lost 80% of it's value then I would research why so that I can determine if it is a bargain or if it will never recover.
Imagine being presented with a fund for $24 per share. Without further context, tell me is this a good or bad deal?
How am I supposed to evaluate a fund if the past performance of the fund is meaningless?
For starters you look at the investment contents of the fund and research the companies to make decisions as to whether you think they will be worth more in the future.
Gamblers buy stocks/funds based solely on price.
Investors make their decisions based on company data.