Pretty open ended question, and im obviously uninformed
But I was curious as to why hedge funds or large asset managers don't liquidate their positions when they know a recession is about to happen, or convert to mostly shorts?
I have heard of hedge funds maintaining a neutral position in which they have the same amounts of longs and shorts but is that common or required?
And while i understand that many hedge funds shine during recessions im also wondering why that it is, or why others asset managers don't liquidate or short in similar instances?
Is it because their positions are too large to do that without causing unnecessary damage?
Obviously have a lot of questions, and would appreciate as much insight or understanding any of you could offer as to the workings and strategies of hedge funds and other managers.