From Jim O’Shaughnessy of O’Shaughnessy Asset Management: Investors are well advised to look at short-term performance as a worthless indicator for what will happen over the long term. Indeed, short-term performance can be among the most misleading to investors and should be heavily discounted. The stock market combines both luck and skill, with luck more pronounced over short time periods, and skill more telling over long periods of time. Investors should concentrate on what is probable rather than what is possible. If you organised your life around things that might possibly happen to you, you’d probably never leave your house, and when you did, it would only be to buy a lottery ticket. Consider, on a drive to the supermarket, it is highly probable that you will get there, buy your groceries and get back home to unpack them without incident. But what’s possible? Almost anything — it’s possible a plane flying overhead could lose an engine, falling directly on your car and instantly...
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