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/)
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They’ve been making terrible bets since 2016 or so, in the past year certain hedgefunds have lost billions.
But someone who has millions in their investment account doesn’t want to worry about anything stock related so they go to the biggest fund. They think oh this fund has lots of money, (in reality they have illiquid assets) they’ll give me returns.
A good example is Michael Jordan whose net worth dropped 500 million in a single year and it’s speculated that it was from a bad bet shorting GME.
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