1. Math
This is an example of the how one might conclude the wrong thing when looking at mutual fund returns from year to year...... In 2008 a fund lost 37.13% and gained 65.71% in 2009.... Then in 2010 it gained 12.66%,0 so if one added -37.13 to +65.71 to +12.66%.... the numbers come to positive 41%.... Giving the impression that one would have made about 41% over those three years....... However if ones applies actual numbers to history, it comes out differently...... If one started with $100 and then it went down 37.13% ($37.13) than one would have $62.87...... the following year went up 65.71%..... in which would have brought it$104..... The next year it went up 12.66% which brings it to \$117..........