From Bloomberg: "You have to wonder how long an industry that underperforms
the broader market will stay around. Goldman Sachs published a chart today comparing
the performance of hedge funds that invest in equities with the major
stock-market indexes. Based on Goldman's research, the average hedge fund is up
just 5.4 percent so far this year. During the same period, the Standard &
Poor's 500 Index has risen 15.4 percent.
"....Then there's the lack of volatility. Hedge funds often
profit from discrepancies in prices between related assets, and these tend to
shrink during calm periods in financial markets
The biggest reason for the market tranquility might be the Federal
Reserve's repeated assurances that it will maintain zero interest rates and
provide monetary stimulus until the economy recovers, and unemployment ebbs.
"That may just account for the recent flurry of stories about
how much hedge-fund managers hate Fed Chairman Ben Bernanke. He's putting them
out of business…."
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