on the subject of money management anybody care to explain the below. Quote from makloda: Your criticism is missing the point. No hedge fund investor is interested in outperforming your simple buy and hold strategy. Outperformance is (almost) entirely irrelevant. Hedge Funds are measured by their ability to deliver risk adjusted returns. The typical HF investor is looking for a) positive monthly/quarterly/annual returns regardless of the performance of the strategies' underlying markets (e.g. equities, commodities, currencies etc.) b) low volatility of returns. are you saying that the risk adjusted returns of hedge funds are less than buy and hold strategy after all expenses? the original question was what percentage of hedge funds do better than a buy hold strategy after all expenses including taxes. why invest in a hedge fund for the long term if they can not exceed after all expenses including taxes a buy and hold strategy.