http://www.wallstreetmatador.com/stock-charts/beyond-the-glory-hedge-funds/ Stock Chart Analysis, Investment Ideas, Trading Strategies - Chasing the Bulls on Wall St. Sat, 08 Nov 2008 09:14:17 +0000 hourly 1 http://wordpress.org/?v=3.2.1 http://www.wallstreetmatador.com/stock-charts/beyond-the-glory-hedge-funds/comment-page-1/#comment-252 Dan Thu, 19 Jul 2007 17:03:46 +0000 http://www.wallstreetmatador.com/stock-charts/beyond-the-glory-hedge-funds/#comment-252 I've always been kind of confused about statistics about hedge funds and how they often miss "benchmarks." Are these benchmarks selected by the funds themselves or by some other party. I feel that there is some misconception as far as what hedge funds are and what they are supposed to do. These days hedge funds seem to define any sort of investment partnership which can have any sort of investing strategies ranging from highly risky to rather conservative. Truth be told, the original hedge fund (and I would hope still remain the majority of funds that exist today) was not necessarily meant to beat the broader markets in any one year. A HEDGE fund is meant to do exactly that, hedge against down years. Thus, a good hedge fund might just track the markets or return just below the markets during bull markets and hopefully beat the tar out of the markets during bear markets. If you think about it, the rules of probability for any long/short fund would seem to dictate that they underperform bull markets and outperform bear markets. After all, unless you're one hell of a stock picker, your longs and shorts should generally move in opposite directions. I’ve always been kind of confused about statistics about hedge funds and how they often miss “benchmarks.” Are these benchmarks selected by the funds themselves or by some other party. I feel that there is some misconception as far as what hedge funds are and what they are supposed to do. These days hedge funds seem to define any sort of investment partnership which can have any sort of investing strategies ranging from highly risky to rather conservative. Truth be told, the original hedge fund (and I would hope still remain the majority of funds that exist today) was not necessarily meant to beat the broader markets in any one year. A HEDGE fund is meant to do exactly that, hedge against down years. Thus, a good hedge fund might just track the markets or return just below the markets during bull markets and hopefully beat the tar out of the markets during bear markets. If you think about it, the rules of probability for any long/short fund would seem to dictate that they underperform bull markets and outperform bear markets. After all, unless you’re one hell of a stock picker, your longs and shorts should generally move in opposite directions.

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