Very important to remember that hedge funds are about maintaining liquidity even during downturns, index funds have built in diversification, but they still mat

Very important to remember that hedge funds are about maintaining liquidity even during downturns, index funds have built in diversification, but they still match the general market. Hedging has opportunities to have cash available, or commodities that hold their value (including volume to convert it into liquid cash) to make other bets on the way back up. This is also why a lot of investment advice from time immemorial includes diversifying from stocks to bonds and other, more stable instruments as you age (e.g. commodities, real estate, etc.). There's also other things about having a stable volume of trade being good, e.g. reduce the likelihood you are affected by runs, e.g. SVB in 2022, or oil prices in the height of COVID19 panics and supply shocks.