Quote from: Hydrogen on Today at 07:31:53 PM

The hedge fund format could be a bad indicator for gauging average investor performance. I think hedge fund managers are very limited and restricted with their trading. They must buy and sell assets at inopportune times to accommodate clients depositing and withdrawing funds. This is one reason their historical returns are typically less than 5% annually. Which is a very low return on investment (ROI). Hedge funds also tend to play it safe as they trade with large sums of other peoples money.

Day traders do better than hedge fund traders. Crypto traders do better. Everyone does better than hedge funds on average.

The hedge fund statistic is where to look to find asset traders with the lowest average return on investment.

Any sources on these claims?

There are great hedge funds that outperform in the long run, like Rennaisance Technologies managed by Jim Simons.

But the vast majority just return market returns over the long run before-fees and therefore below market returns after-fees. The hedge fund format is definitely outdated and needs to include more asset classes than just the traditional long-short equity-bond portfolio, but I don't think that day traders can do better than them on an after-fee basis in the long term either.