GUEST AUTHOR BLOG by Michael J. Mauboussin author of "The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing."
Say you're an investor looking to put some money to work in the market through a mutual fund. How do you pick which fund you'll invest in?
If you're like most people, you'll find a reputable investment company and scan for the funds that have done well recently. The chances are good that you'll buy one of these winners — and that you'll live to regret the decision. In fact, professors of finance calculate that buying high and selling low costs investors 1 percent of their returns every year, a sizeable sum.