is a higher r squared better 
here again it depends on the context suppose you are searching for an index fund that will track a specific index as closely as possible in that scenario you would want the fund s r squared value to be as high as possible since its goal is to match rather than trail the index on the other hand if you are looking for actively managed funds then a high r squared value might be seen as a bad sign indicating that the funds managers are not adding sufficient value relative to their benchmarks the bottom liner squared can be useful in investing and other contexts where you are trying to determine the extent to which one or more independent variables affect a dependent variable however it has limitations that make it less than perfectly predictive 