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.
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!
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!
For other blog posts like this one, have a search on Financial Markets 101 category.