Aren't hedge funds often thematically a form of insurance? If I had a million, I'd probably put 80% in index funds, 10% in hedge funds that were shorting companies that would be negatively affected by global warming, 10% in hedge funds that were betting on another recession.
Re:How much do hedge fund traders earn?
by ForHackernews on Wednesday May 10, 2017 @07:09AM
(#14307302)
At one time, they were a "hedge", but the term is an anachronism today.
How is buying 3000+ of the worlds largest companies "putting eggs in the same basket"? Buying some bonds and real estate funds can be nice as well but the diversification benefits are usually overstated. Worldwide stocks are already incredibly diversified.
Re:How much do hedge fund traders earn?
by headmelted on Wednesday May 10, 2017 @08:14AM
(#14307560)
I maybe should have clarified:
In this case, the basket would be equities.
And in that respect, both are plays in the same market for wildly different charging structures.
Re:How much do hedge fund traders earn?
by nostalgiac on Wednesday May 10, 2017 @04:38AM
(#14306769)
An Index fund can refer to one of the many many different types of weighted/diverse indexes that exist.
Dumping all your money into an ASX200 Index Fund is a lot different to putting it all into Vanguards Total World Stock fund.
Obviously you'd never advise someone to put all their eggs in one basket, but in this case, you're comparing identical baskets - and one of them as a hole in the bottom.