yes that's exactly how it works for me anyway. also i always think of failure first and success second, like how many ways can i discover this can fail. it eliminates and educates on what actually will work. i think most people only focus on success, i love and obsess with failure. hedge funds as an industry are mediocre at best with managing risk, they are the mcdonalds of money management.
What kind of performance have you had? Are you doing better than a buy and hold of SPY? "Hedge funds often struggle to consistently outperform the market after accounting for fees. While they employ complex strategies to generate returns, studies have shown that the S&P 500 Index has historically outperformed most hedge fund strategies over the long term."
My return is LESS than the S & P 500...But I choose it that way. As I get older (I'm 69 1/2) I look for more stability...Yeah, I own QQQ. IBM, Apple. Very Warren Buffet type value. I do try for the home run stocks...But less and less as I get older. I have always weighted more "defensive" in my investing than most... I also have more foreign stocks (Canada, Japan, AU)...I believe that maybe the US has mortgaged their future with their borrowing habits... What a shock! I own more gold/silver coins/stocks than most. I "hide" more assets than most...Roth IRAs, holding biotech ETFs that I never sell, rentals that grow in value (but not much income). This leads to a smaller tax bill. Pass much money to kids and grandkids... The assets are there, but not well seen... I also have the right amount of CDs/Treasuries... So in general, I would say my investment style is value with preservation of capital...
Is that choice a sleep at night kind of thing or that you have better things to do than managing your investments? I've got a few years on you and enjoy looking after my own money. Right now I'm in the process of finding a manager for when I drop dead or become demented and unable look after things. My spouse has no interest in finance at all. My plan is to allocate part of our portfolio to a manager and if they can outperform me then I'll allocate more funds to the manager.
As long as they perform positively I'll move money to them on my demise. I'm doing quite a bit of due diligence. Checking out long term records. I'm hoping that the portfolio can continue to fund lifestlye and continue to grow. I have managed to do that for the last 20 some odd years.
Outperforming the market is the naive way to look at it. The stability of returns is what is important. Funds could always under perform but compounded returns could be greater due to volatility drag.
Could be but you'd think they would bring that to your attention. If you are hiring someone to manage your money, or doing it yourself, if you can't outperform a buy and hold SPY strategy, why are you wasting your time?
It took me a long time to understand this, but many investors are very satisfied with results that underperform the S&P 500, if the portfolio has less risk and less volatility.