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Hedge Funds
Old 08-09-2012, 02:52 PM   #1
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Hedge Funds

I don't have any, have not figured out how to select one. Now this article at Seeking Alpha has convinced me that I don't have the resources, financial and analytical, to invest in them:

Why Investors Should Avoid Hedge Funds - Seeking Alpha

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Old men ought to be explorers
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Old 08-09-2012, 03:02 PM   #2
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Interesting interview with Bob Brinker about 2 weeks ago with a guy who wrote a book on hedge funds. The Hedge fund Mirage by Simon Lack.

IIRC, Mr. Lack stated that in the last ten years a simple asset allocation of 60% total market index and 40% total bond index would have beaten most hedge funds every year, not just for the 10 years, but every individual year for the last 10 years.

Check this out for yourself. My memory could be faulty. And, of course, always do the due dilegence.

The worst decisions are usually made in times of anger and impatience.
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Old 08-09-2012, 07:03 PM   #3
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There would also appear to be considerable doubt as to whether they outperform mainstream asset classes. At the very least, I have never managed to get comfortable that there is anough reliable data to reach that conclusion: Do hedge funds outperform the market? - Quora

Even if they do outperform, it is possible that any outperformance is a result of taking on additional risk:

Also, most of the hedge funds which I might be able to access require me to invest an uncomfortably large percentage of my net worth and there have been no shortage of funds which have managed to destroy all or most of their investors' money.

I'll pass.
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