Profiting from Hedge Funds: Winning Strategies for the Little Guy

Preface

Managing one’s assets appropriately is indeed a monumental task. While select money managers with the elusive Midas touch easily outperform the market averages by wide margins over long periods of time, the majority of other money managers and individual investors unfortunately underperform the market averages. As these three groups—fruitful money managers, their struggling colleagues, and individual investors—represent the bulk of the market, it is evident the former gains at the expense of the latter two.

The track record of individual investors as a group has plenty of room for improvement. Equities and mutual funds are generic investment options available to all individuals, regardless of their net investable asset status. Net investable assets are the total value of an individual’s investments, excluding his or her primary residence and retirement accounts. Individuals with investable wealth of less than $100,000 are at the lower end of this spectrum, while the superwealthy, with net investable assets exceeding $10,000,000, are at the other end. An uptick in the net investable assets of an individual means better investment prospects, as the chance to wrap one’s fingers around such choice privileges as separately managed account (SMA) composites, hedge funds, private equity partnerships, venture capital, angel investment, and so on are available only to those higher up in the net investable assets ladder. The best among these exclusive opportunities manage to beat ...