Hedge Funds: Where the Smart Money Invests?

From the sketch guy at the NYTimes.com:

1. Hedge fund performance has been terrible.

2. Hedge fund expenses are insane.

3. People continue to invest in hedge funds anyway.


Investors sank more than $88 billion into hedge funds in 2014.  

Why do people keep doing this?

One assumption might be that they don’t know that hedge funds are just really expensive, underperforming mutual funds for rich people...

Maybe hedge funds give people something to talk about at parties...

The attraction could also be in the pure entertainment value...

Or the reason could be more subtle.

Americans have a hard time admitting they’re average.

Hedge funds have gone out of their way to push the idea that they are better than average.

For wealthier people, the desire to claim that golden ticket, to be better than average, may be worth every penny of the insane fees they pay...
----
Link:  http://www.nytimes.com/2015/03/09/your-money/a-mystery-in-hedge-fund-investing.html