Hedge fund investors have another bad year. Hedge funds have become more direct investment vehicles in the last several years instead of a well diversified portfolio of investment opportunities.
The S&P 500 equity bond index has now outperformed it's hedge fund rivals for ten straight years, with the exception of 2008 where hedge funds did actually hedge.
As a professional investor it is important to recognize opportunity and be able to act quickly and effectively. Right now is not a good time for the financial markets. The stock market traders are watching governments and the governments are watching the markets.
The way a successful investor makes money is by looking beyond traditional investments and making a niche for themselves. One of the best performing sectors in 2012 and I expect it to do well for many years is private financing sector. Blackrock one of the best performing hedge funds in the world have a multi-billion dollar fund committed to mezzanine financing. Now that the banks can't offer specialized financing to companies private firms have stepped up and are making boat loads of money at it.
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