Wednesday, January 27, 2016

Hedge fund

Hedge funds have not been doing well since 2009 as there are nothing to hedge in a rising market. A few are doing great. Learn what and why they are doing great. The reasons are obvious by now. The successful ones unloaded energy stocks and Chinese stocks after the crisis but before the big losses. Some correctly shorted these problem sectors afterwards.

However, I still advise not to buy hedge funds for the average investor: 1. The better ones are not opened to new investors or ask for a king's ransom . 2. On the average (including the closed hedge funds), they're not doing good after the high fees. 3. Even the good one last year could be a bust this year as they're betting high. Examples abound.

To make money, you need to depend on yourself. To start, play simple market timing. Buy value stocks when the market is not risky. Be patient. Evaluate your bought stocks every 6 months or so and act accordingly. Following these simple 'techniques' (or common sense), you should at least beat the market (or SPY) in the long run. Proven and being practiced by many successful retail investors among us.

For more of my reasoning, check out the book described next. It has 800 pages (6*9) for $9.99. It could be the best $10 you ever spend.

The above is an abstract from my book "Complete the Art of Investing" which is available from Amazon.

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