Stock Market · True or False
Is it true that chasing past winners is a safe strategy?
False. Past performance does not guarantee future returns.
Past performance is not predictive — chasing winners leads to buying at elevated prices where the risk-reward ratio has already deteriorated significantly.
Buying a stock because it doubled last year, not realizing that the easy gains are likely gone and you are now buying at a much riskier price.
This scenario is one of 155 in the Skillful Stock Market track. Each card states a situation, you decide true or false, and the explanation follows immediately.
- Answer
- False
- Track
- Stock Market
- Topics
- behavioral-finance, performance-chasing
Also asked as
Is chasing past stock market winners a good strategy? Why buying stocks that already went up is risky? Should you invest in stocks because they performed well recently?
The scenario in full
Chasing past winners is a safe strategy.
Frequently asked questions
Is it true that chasing past winners is a safe strategy?
False. Past performance does not guarantee future returns.
Is chasing past stock market winners a good strategy?
False. Past performance does not guarantee future returns. Past performance is not predictive — chasing winners leads to buying at elevated prices where the risk-reward ratio has already deteriorated significantly.
Why buying stocks that already went up is risky?
False. Past performance does not guarantee future returns. Past performance is not predictive — chasing winners leads to buying at elevated prices where the risk-reward ratio has already deteriorated significantly.
Should you invest in stocks because they performed well recently?
False. Past performance does not guarantee future returns. Past performance is not predictive — chasing winners leads to buying at elevated prices where the risk-reward ratio has already deteriorated significantly.
Where does this stock market question come from?
It is one of 155 scenarios in the Skillful Stock Market track. Each card states a realistic situation, you decide true or false, and the explanation follows immediately.
How do I practise more questions like this?
Start the Stock Market quiz. It runs about two minutes per session, the first 150 questions are free across every category, and your progress saves automatically.