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There is a reason why they hedge funds underperform the market. Not by a little, by quite bit. They try too hard to predict the market, when in the long run if
by impulser_ 4y ago
There is a reason why they hedge funds underperform the market. Not by a little, by quite bit.
They try too hard to predict the market, when in the long run if they just stayed long they would have done better.
- selectodude 4y agoThe key word in hedge fund is hedge. They're not supposed to outperform the market. They're supposed to not fall as far as everything else during a crash as well. Granted, that's not really how things work in practice anymore, but that's supposed to be the idea.
- bidirectional 4y agoWhy is 'the market' the only benchmark worth comparing to? For many investors it is too volatile, they can take worse performance if the chance of major drawdowns is reduced.