Can You Outperform Ken Griffin and Jim Simons?

You can outmatch the big names on Wall Street… Published By Money & Markets, LLC. January 31, 2024 Published By Money & Markets, LLC. January 31, 2024 [Turn Your Images On] [Turn Your Images On] From The Desk of [Michael Carr]( Editor, [Money & Markets Daily]( [Hedge Funds Wish They Had This Edge]( Money & Markets Daily, Hedge funds often capture headlines. Ken Griffin’s Citadel Investment Group started with $4.2 million in 1990. At the end of 2023, the firm had $58 billion in assets under management. What’s maybe even more impressive is Citadel has returned $25 billion in capital to investors since 2018. Then there’s Renaissance Funds … run by math whiz Jim Simons. This hedge fund returned an average of 39% a year after fees for decades. At that rate, your investment doubles every 22 months. But here’s the catch. These returns aren’t available to individual investors. Griffin, Simons and many other successful hedge fund managers don’t provide access for new investors, or they set the minimum investment at millions of dollars. For us, however, that might be a good thing. The typical hedge fund is like a club that Groucho Marx would be allowed to join. The great comedian supposedly said: “I don’t want to belong to any club that would have me as a member.” Turns out, that’s great investment advice… Beat the Average Hedge Fund The news may steer our attention to select hedge funds with exceptional performance … but the average hedge fund [returned]( only 7.6% last year. Meanwhile, the SPDR S&P 500 ETF (NYSE: SPY) gained almost 24%. Now, one year isn’t enough time to judge an investment’s performance. But the longer term doesn’t improve for hedge funds in comparison to SPY. Over three years, the average fund gained an average of 4.3%. That’s exactly half the 8.6% return of SPY in that time. And over five years, hedge funds gained 7.0%. SPY did almost 100% better with a 13.9% return. We can look at a number of reasons that hedge funds, as a group, underperform. --------------------------------------------------------------- [Turn Your Images On]( From our Partners at Banyan Hill Publishing. [Are You In? Join the $40 Trillion AI Energy Revolution!]( Discover the AI breakthrough that’s 4 million times more potent than oil. A single liter of AI Energy equals 29,000 barrels of oil. This "5th Epoch" of energy could lead America to 100% energy independence. Billionaires are already investing. Learn how you can be part of this monumental shift in global energy. [Secure Your Spot in the AI Energy Boom Now!]( --------------------------------------------------------------- How Typical Hedge Funds Play It Safe ... and Underperform A primary reason is their high fees. A typical hedge fund charges about 1.5% in management fees. That’s 16.7 times more expensive than the SPDR S&P 500 ETF Trust (NYSE: SPY). Plus, fund managers take 20% of the profits if they beat their benchmark. All those fees explain why there are more than 30,000 hedge funds in the world. That means there are almost as many hedge funds as there are Starbucks. For many managers, the primary goal of the fund is to keep the fees coming in. That means they invest in stocks that are safe. We have an old saying from the time when Groucho was on television: “No one gets fired for buying IBM.” If managers stick with industry leaders, they can defend their positions to investors even when they underperform. This is one reason individual investors can beat hedge funds. We don’t have to buy the same stocks everyone else is buying. We can buy low-priced stocks. Small Stocks: The Club You Want to Join Small stocks — generally meaning those priced under $5 — are covered by restrictive SEC rules. Managers may want to avoid these stocks to avoid running afoul of authorities. Even if they take time to understand the rules, managers may still avoid the stocks so that they don’t create additional compliance costs. After all, they are managing the fund to generate high fees, and there’s no point in incurring high costs in the business. But their loss is your potential gain. Individuals don’t face these restrictions or costs. That means you can find low-priced stocks capable of delivering triple-digit and even quadruple-digit gains, as I pointed out [last week]( in less than six months. In fact, my colleague Adam O’Dell has already uncovered [five top stocks]( that are virtually invisible to Wall Street. His research shows that they have the potential to rise as high as 500% this year. You’ll learn how you now have the best chance of making exponential profits and surpassing the average hedge fund in Adam’s [$5 Stock Summit](. But hurry, we’re closing the doors on this offer at midnight Eastern time tonight. Until next time, [Michael Carr]( Editor, [Money & Markets Daily]( --------------------------------------------------------------- Check Out More From Money & Markets Daily: - [GET PICKY WITH SMALL CAPS IN 2024]( - [WHAT I TOLD MY GRANDPA ABOUT STOCKS]( - [YOU HELPED ME FIND THIS BULLISH INCOME STOCK!]( --------------------------------------------------------------- [Turn Your Images On]( Privacy Policy The Money & Markets, P.O. Box 8378, Delray Beach, FL 33482. To ensure that you receive future issues of Money & Markets, please add info@mb.moneyandmarkets.com to your address book or [whitelist]( within your spam settings. For customer service questions or issues, please contact us for assistance. The mailbox associated with this email address is not monitored, so please do not reply. 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To ensure that you receive future issues of Money & Markets, please add info@mb.moneyandmarkets.com to your address book or [whitelist]( within your spam settings. For customer service questions or issues, please contact us for assistance. The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: [( Legal Notice: This work is based on what we've learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. Money & Markets permits editors of a publication to recommend a security to subscribers that they own themselves. However, in no circumstance may an editor sell a security before our subscribers have a fair opportunity to exit. Any exit after a buy recommendation is made and prior to issuing a sell notification is forbidden. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. (c) 2024 Money & Markets, LLC. All Rights Reserved. Protected by copyright laws of the United States and treaties. This Newsletter may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Money & Markets. P.O. Box 8378, Delray Beach, FL 33482. (TEL: 800-684-8471) Remove your email from this list: [Click here to Unsubscribe](