The extended volatility in the markets has caused hedge fundmanagers around the globe to post losses, to buy treasuries and, in some cases, to put out the “gone fishing” sign. It would appear that many of these so-called “Wizards of Wall Street” just can’t figure out how to make money when the markets are moving so quickly.
What I think it means is that the market is telling us who is a manager and who is just a marketer. The lesson from these bad numbers is that many who say they know how to make money in both good markets and bad don’t really have a clue what do when the markets zig and their portfolios zag!
As the summer continues to heat up and the economy continues to cool down, it’s a perfect time to do some due diligence. Investors, regardless of the size of the portfolio, need to perform a mid-year review of their investments. It’s time for them to take stock of what’s going on with their money and make sure that they are getting what they pay for!
The summer is usually relatively quiet — the calm before the storm of the fall – and is a good time to turn on, tune in and check out what’s going on with your money. Call your advisor, call your broker, call your fund managers and ask questions and demand answers. It is your money, you need to know what is happening with it and you need to make sure it is working for you they way you intended when you made the investment or hired the advisor. Make changes, reallocate and get things going. It’s your money – make it work for you!
The situation with the hedge fund industry is that managers can’t get it right all the time. Many who have had good runs in the past are being hit currently, and I am sure that there are some who got whacked in the past who are having great runs now. What you need to do is to make sure that you understand how your money is being managed and that the manager has conviction in what he or she is doing. When they start to doubt themselves or change their strategy, it is time to move on. Stick with people who believe in what they know and do the same thing over and over again. That is the only way to win in the long run. And all of us are in this for the long run.
In just a few weeks, we will be kicking off the 2010/2011 HEDGE Answers Conference Call Series. This year we have two streams, our Launch Sessions and the new Strategy Sessions. The Strategy Sessions are unique opportunities for investors of all shapes and sizes to learn how money is truly managed. These hour-long conference calls allow you to hear directly from portfolio managers about how they come up with an investment thesis, conduct research and put on a trade. These calls allow you to learn first hand how money is managed. Click here to learn more.
Get in on the discussion, register for HEDGEAnswers today!
THINGS THAT DRIVE ME CRAZY
Nothing to report this week. Stay tuned; I am sure this will change!