Basically the title. Hedge funds underperform every year as compared to broader ETFs like S&P500 by more than 10%! Given this, who invests in hedge funds? Are they stupid or am I stupid?
[https://www.aei.org/carpe-diem/the-sp-500-index-out-performed-hedge-funds-over-the-last-10-years-and-it-wasnt-even-close/](https://www.aei.org/carpe-diem/the-sp-500-index-out-performed-hedge-funds-over-the-last-10-years-and-it-wasnt-even-close/)
In: 128
I love when I see a question like this in eli5. Have you guys ever talked to a five year old?
Here’s the 5 year old explainer: people who have lots of money get told by people who want their money, that they can make more money by giving it to them.
There’s a whole lot less rational behavior in the world than economists would have you believe there should be.
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