When you hear about George Soros or other hedge fund managers placing bets against a country’s currency and making a lot of money, do you get jealous?
A big advantage for hedge funds is that they can be as diversified as they want to be. That enables them to limit risk in ways stock index funds and many actively managed mutual funds cannot.
In the financial media, you will see arguments in favor of active management of mutual funds and the importance of allowing a fund manager’s long-term strategy to play out, rather than chasing performance by purchasing shares of whatever fund performed best during the previous year.
