Take the typical disclaimer often seen where investment products can be found. Here is a sentence from the fine print of BlackRock's fundamental equity fund page:

Performance data quoted represents past performance and is no guarantee of future results.

I want to unpack this axiom just a bit more and tag on a statistics term at the end. The goal is to ground the sentence with the statistical concept that underpins it.

I thought we might try:

Performance data quoted represents past performance and is no guarantee of future results because equity markets follow random walk characteristics.


Would adding "because equity markets follow random walk characteristics" be sufficient? Would I need to add/change anything to ground the disclaimer in statistics language?


This question is not really about red tape around the marketing of financial products or about semantics. I think we can just answer the question in a black box environment, we don't need legal/mosaic or any framework other than statistics. I want the only lens we see the disclaimer through to be statistics.

If it helps, imagine a statistics teacher trying segway into his quantitative finance 101 lecture by using this disclaimer and adding the underpinning statistical concept behind it.

  • $\begingroup$ Not sure this on-topic here. However, why would you want do this? What is the benefit? Why do you believe you could write this better than Blackrock did? $\endgroup$
    – Bob Jansen
    Jun 9, 2021 at 6:55
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    $\begingroup$ If you add they follow a random walk, you essentially add that your offering is useless. If it is truly a random walk, it's impossible to outperform the overall market average other than by sheer chance. $\endgroup$
    – AKdemy
    Jun 9, 2021 at 7:18
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    $\begingroup$ The aim of the disclaimer is not to inform but to provide legal cover. $\endgroup$
    – Bob Jansen
    Jun 9, 2021 at 7:54
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    $\begingroup$ investor.gov/introduction-investing/investing-basics/glossary/…. It's simply a SEC requirement for funds to tell investors that a fund's past performance does not necessarily predict future results. $\endgroup$
    – AKdemy
    Jun 9, 2021 at 8:18
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    $\begingroup$ [...] because equity market returns are not stationary.”? $\endgroup$ Jun 9, 2021 at 14:30


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