Hedge Funds achieve minimal returns in 2016 & should you buy the S&P500 index?

I came across the chart below on my Twitter feed.  It’s a report compiled by some smart investment houses – which shows how small the returns achieved by hedge funds are becoming – see below.  In fact, the S&P 500 index has done more than twice as good as the average hedge fund return for 2016 year to date.

hedge-fund-performance

 

Does this mean that you should invest in the S&P 500 index?

From a ‘technical’ perspective, one should be buying if the price closes at current levels or higher at the end of November – the November price action is bullish, and price looks to be finally breaking out of the 2-year 2015-2016 consolidation zone.    From a fundamental perspective – the rally over the last few years has basically been fuelled by cheap money, by US companies buying back their own shares  and by low interest rates, and Trump has just been elected 45th US President, and the Eurozone might start disintegrating.  I normally try to forecast prices for the next 2-3 hours – so I have no idea whether one should buy the S&P here or not!

sp-monthly-chart

I think the best investment one can make at this time, is to invest in yourself – in your future, in your education, in your own business, or in things that make you feel happy!

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5 Responses to Hedge Funds achieve minimal returns in 2016 & should you buy the S&P500 index?

  1. William says:

    Okay, so the market has been and will continue to be quite volatile but for how long “do you think” we should keep investing in ourselves before it’s back to normal?

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    • I don’t have an answer for you. My apologies!

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      • William says:

        Very true “Automateddaytrading”, in fact some have switched to mutual funds because of ease of access, less expenses in comparison to hedge funds and can outperform major market indices in uncertain times like we’re in now. They can also be hedged.

        They’ve performed badly since 2014 and continue to under perform the S&P 500. The high fees they demand are questionable with such bad performance.

        The S & P 500 index has been on the rise since 2012 though had a blip in the 1st quarter of 2012, 3rd quarter of 2015 and yet again in the 1st quarter of 2016 but it seems to have bounced back though in general, it has been bullish all the while and continues that trend. As things stand, I’d invest in the S & P index.

        It is indeed difficult to say when the current market uncertainty will let off owing to various “mainly” political uncertainties but I think, it’ll last until the 2nd to 3rd quarter of 2017. Self investment will continue until then but not forgetting to test the market performance every now and then to best gauge its performance in these changeable times.

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  2. Obviously no one can predict the future, but the trend is up for now. How long that will last is anyone’s guess.
    Hedge funds have had a bad time since 2009 due interest rates being stable for long.

    Liked by 1 person

  3. Pingback: 2016 Performance for Trend-Following Hedge Funds | Trick or Trade

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