Please explain why I shouldn't invest in hedge funds and stick to my index funds
What's the upside/downsides to investing in hedge funds inAppvalleystead of regular index funds?
They seem like a good alternative.
What's the upside/downsides to investing in hedge funds inAppvalleystead of regular index funds?
They seem like a good alternative.
Career Resources
right now, you are right, you should not invest in hedge funds
No one invests exclusively in hedge funds. Hedge funds and other “alternative” investments serve, unironically, to hedge your risk/exposure to traditional assets. In the same way that commodities/gold might be a 10% allocation to a portfolio, so too can hedge funds serve as a piece of portfolio construction to achieve optimum portfolio construction according to Modern Portfolio Theory. For most sophisticated investors with large or complex balance sheets and goals, hedge funds offer diversification to long-only traditional exposures.
If I were a 60 year old multi-millionaire with no interest in taking market risk (what if the market tanks and I’m too old to ride out another cycle), I genuinely would like to put my money in a fund like Citadel or Millennium. Double digit returns post fees? That sounds good to me.
Balyasny is offended by your comment
Only a minority of them actually beat their respective index after costs over the long term. You most likely do not have the expertise to successfully pick winners ex ante. Post ante, these funds have a long investor queue and you are nowhere near the front.
Aliquid beatae amet odio qui et. Voluptatem itaque est architecto illum enim quibusdam iste.
Quas qui adipisci placeat officia dolor. Dolores ipsa voluptas ut fugit. Natus mollitia quis porro omnis quae laborum. Ut enim esse vero. Enim deserunt corporis voluptas corrupti minus provident et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...