SEC Explains How to Evaluate Investment Performance Claims

The SEC Office of Investor Education and Advocacy identified factors to consider when making a decision based on investment performance claims.

According to the Investor Bulletin, investors can identify these factors by asking themselves two questions: (i) how is performance calculated and presented? (fees, financial circumstances, and market and economic conditions); and (ii) how reliable is a performance claim? (performance guarantees, "backward looking" performance, cherry-picking past performance, and benchmark performance).