Hedge funds confirmed as toxic investments

I first produced a list of toxic investments three years ago. The aim was to draw investors attention to those investments that were sure to cause you financial damage and which should be avoided at all costs.

Hedge funds were at the top of my list. They create tremendous wealth of those managing them. The clients who buy them do not fare well at all.

This Economist article explains the problem.  Rich managers, poor clients

Our evidence-based investing approach continues to outshine those who believe it is possible to charge investors high fees for the promise of 'outperformance'. The fact is that it is extremely difficult to predict investment winners and you need quite a bit of luck to beat the market a few years in a row. The latest figures say it all.

There are over 2,000 UK  investment funds. Less than one in 10 of them managed to better the market return, in each of the past three years. Nine out of ten investors experienced a poor result compared to our lower-risk approach.