<h1>2 Reasons to Avoid Investing in Mutual Funds Based on Past Performance</h1>
<p>Here are the top two reasons you should never invest in mutual funds based on past performance alone. If any of this is helpful, like and follow <strong>Social Cap</strong> for more daily financial literacy.</p>

<h2>1. Past Performance is Not Indicative of Future Results</h2>
<p><strong>Past performance is never indicative of future results</strong>. If you don’t know that, seriously, you should not be investing. If someone tries to tell you otherwise, you should not be listening to them about anything related to investing.</p>

<h2>2. Survivorship Bias</h2>
<p>Most mutual funds that you see online will have performed well over the last few years. If they hadn't performed well, what do you think would have happened to them? Most companies will only keep their winners. This phenomenon is called <strong>survivorship bias</strong>, and if you invest, you need to be aware of it.</p>

<p>Understanding these concepts can help you make informed decisions and avoid common pitfalls in investing.</p>