If you look at the ten best-performing Internet funds from 1997 to 2002, the time-weighted return is 1.5% per year positive, so the funds went way up and then they went way down.
This computation, which is known as a time-weighted return, assumes something, however: a hypothetical investor who started five years ago and stayed put.
The five-year performance quoted above (like the ones in the tables beginning on page 136) is a time-weighted return, measuring results for a hypothetical investor who put in a sum at the beginning and stood pat.
