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Just Hedge Funds And The Blues: Why Can’t Hedge Funds Beat The S&P 500 (Or The Federal Reserve)?
Confounded Interest ^ | 1/1/2022 | Anthony B. Sanders

Posted on 01/01/2022 9:44:38 AM PST by Browns Ultra Fan

Just hedge funds and the blues. Or hedge funds got the blues in 2021.

2021 saw the S&P 500 index generate a return of 28.7%. Much of it thanks to The Federal Reserve “stimulypto” or excessive monetary easing.

This image has an empty alt attribute; its file name is spxfarbast.png But only three hedge funds beat the S&P 500 index: Senvest, Impala and SR. Thanks to fees (trading and management), the other hedge funds underperformed the S&P 500 index. And underperformed The Fed!

Melvin Capital was the worst performing hedge fund of the ones examined.

Yes, hedge funds had the blues in 2021 with only 3 hedge funds beating the S&P 500 index.

Welcome to 2022!!

(Excerpt) Read more at confoundedinterest.net ...


TOPICS: Business/Economy; Government; Politics
KEYWORDS: fed; investments; pelosi
A corrupt financial system thanks to Wall Street and The Fed. Massive stimulus and Pelosi and McConnell et al are making even LARGER fortunes.
1 posted on 01/01/2022 9:44:38 AM PST by Browns Ultra Fan
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To: Browns Ultra Fan

If you can’t beat the indexes, buy them. :)


2 posted on 01/01/2022 9:49:44 AM PST by ArcadeQuarters (Remember the 2020 backstabbers. No more RINOs ever!)
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To: Browns Ultra Fan
A corrupt financial system...

The corruption of the last century is breathtaking. When the truth comes out, many will have to be admitted to their local hospital's psychiatric ward.

We Have it All! (Robert David Steele)

3 posted on 01/01/2022 9:52:08 AM PST by C210N (Everything will be okay in the end. If it’s not okay, it’s not the end.)
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To: Browns Ultra Fan

I took care of my son’s IRA account. He put in a total of $10,000 last year and here at the end of the year it’s at $16,000. Is that beating the S&P?


4 posted on 01/01/2022 9:53:52 AM PST by MeneMeneTekelUpharsin (Freedom is the freedom to discipline yourself so others don't have to do it for you.)
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To: MeneMeneTekelUpharsin

“I took care of my son’s IRA account. He put in a total of $10,000 last year”


2021 IRA Contribution Limits
For 2021, the most you can contribute to your Roth and traditional IRAs is a total of:

$6,000 if you’re younger than age 50
$7,000 if you’re aged 50 or older1


5 posted on 01/01/2022 9:59:15 AM PST by TexasGator (UF)
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To: Browns Ultra Fan

for most people in most circumstances, it is best to invest in a broadly-diversified very low cost fund (a large no-load index fund will usually do just fine as their primary stocks vehicle)

and then add smaller investments of their own choosing outside their fund.. if only to satisfy their desire to “play” the market ... or for some additional purpose like, say, “add an inflation hedge since Biden has unleashed the inflation dragon and it is only gonna get much, much worse”

I’m not against these added investment ventures, they can be selected to reflect the owner’s psychology, desire for risks, and/or specific personal objectives. The core investment fund, though, should I really believe, be along the lines indicated above.


6 posted on 01/01/2022 9:59:35 AM PST by faithhopecharity (“Politicians are not born. They’re excreted.” Marcus Tillius Cicero (106 to 43 BCE))
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7 posted on 01/01/2022 10:07:55 AM PST by Theoria
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To: Browns Ultra Fan

I’ll bet Members of Congress beat the S&P last year.


8 posted on 01/01/2022 10:15:40 AM PST by Night Hides Not (Remember the Alamo! Remember Goliad! Remember Gonzales! Come and Take It!)
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To: Browns Ultra Fan

No, that’s entirely wrong. They can’t beat retail. We can hold longer than they can stay solvent.


9 posted on 01/01/2022 10:28:14 AM PST by wastedyears (The left would kill every single one of us and our families if they knew they could get away with it)
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To: Theoria

Excellent book.

Buffett recommends putting 90% in an S&P 500 index fund. He specifically identifies Vanguard’s S&P 500 index fund. Vanguard offers both a mutual fund (VFIAX) and ETF (VOO) version of this fund. He recommends the other 10% of the portfolio go to a low cost index fund that invests in U.S. short term government bonds

https://robberger.com/warren-buffett-portfolio/#:~:text=Buffett%20recommends%20putting%2090%25%20in,U.S.%20short%20term%20government%20bonds.


10 posted on 01/01/2022 10:29:02 AM PST by Raycpa
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To: TexasGator

He already had money in there. Topped it off at $10,000 last year I should say. He can only put $6,000 per year, as you said. Anyway, got it up to $16,000 recently.


11 posted on 01/01/2022 10:34:41 AM PST by MeneMeneTekelUpharsin (Freedom is the freedom to discipline yourself so others don't have to do it for you.)
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To: Browns Ultra Fan

The WSB apes crushed a lot of the hedge funds when they tried to short various stocks and use their media allies to jawbone companies’ stock prices down.

Remember the Gamestop short squeeze? Remember the AMC short squeeze? It was the hedge funds - most definitely including Melvin Capital - which were getting squeezed.


12 posted on 01/01/2022 11:38:46 AM PST by FLT-bird
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To: Raycpa

I prefer a bit more tech and small/mid cap exposure than just the S&P 500 but prob 50% or more In S&P500 index for nearly everyone is good


13 posted on 01/01/2022 11:57:56 AM PST by rb22982
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To: MeneMeneTekelUpharsin
He already had money in there. Topped it off at $10,000 last year I should say. He can only put $6,000 per year, as you said. Anyway, got it up to $16,000 recently.

In order to determine whether he did better than the S&P we would have to know the beginning balance, the dates and amounts of all contributions, and the ending balance.

If you don't know that those are requirements for determining the performance relative to a benchmark it is not obvious that you are knowledgable enough about finance to be directing his IRA. I am not accusing you of any wrongdoing, just noting a knowledge gap.

Of course the one way to be certain to do as well as the S&P is to invest in a low fee S&P index fund. Two of them come to mind, both Exchange Traded Funds (ETFs). SPY and VOO. Either is a fine choice and the differences are miniscule. The choice really boils down to which has lower commissions at your brokerage house. This path requires no study, very little work and will get you better results than 90% of investors.

14 posted on 01/01/2022 12:39:40 PM PST by CurlyDave
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To: rb22982

The surprise is that the man who became a billionaire by picking value stocks says the average person should not mimic him and simply use index funds. He doesn’t have a lot of confidence that its still possible to beat the average.


15 posted on 01/01/2022 1:04:16 PM PST by Raycpa
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To: Raycpa

You can’t today- way more information available to everyone than 50 years ago. And the deals he’s done in the last 20 years the average person would never be able to do. -85-90% of professional investors lose to the market over 10 years. Worse with retail.


16 posted on 01/01/2022 2:35:33 PM PST by rb22982
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To: Raycpa

“Buffett recommends putting 90% in an S&P 500 index fund.”

well, i suppose that’s all well and good, but that is NOT how Buffet made HIS fortune ... an even BETTER investment approach followed by many was simply to buy Berkshire Hathaway shares and hold them ...


17 posted on 01/01/2022 3:00:22 PM PST by catnipman (Cat Nipman: Vote Republican in 2012 and only be called racist one more time!)
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To: catnipman
...an even BETTER investment approach followed by many was simply to buy Berkshire Hathaway shares and hold them ...

For the past 3 and 5 years SPY has beaten BRK.A.

To be fair, in 2021 BRK.A was slightly ahead of SPY, but did not overcome the underperformance of previous years.

While buying BRK.A has been good to many investors, and is not a bad strategy, I have refrained from holding any. Ask yourself what do you think will happen to the price of BRK.A when Warren Buffett shuffles off this mortal coil? He was born in 1930 and is not going to live forever.

18 posted on 01/01/2022 6:43:10 PM PST by CurlyDave
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To: CurlyDave

I understand your chagrin at my post. I am just not going to post all of the details. I am doing pretty well and am very qualified. Just not going to tell everyone what I’m doing. He just started his IRA and had $10,000 in it several months ago. It is now at $16,050. He’s doing okay. Nite.


19 posted on 01/01/2022 8:32:01 PM PST by MeneMeneTekelUpharsin (Freedom is the freedom to discipline yourself so others don't have to do it for you.)
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