MORE HEADLINES
Economic Update
The Conference Board Consumer Confidence Index remains at a historical low level, standing at 37.7.
Domestic Equity
U.S. equities broadly declined in January.
International Equity
International equity performance in January erased December’s gains.
Fixed Income
The Barclays Capital Aggregate Bond Index declined 0.9% in January.
Real Estate Securities
Real estate investment trusts (REITs) underperformed the broad equity market in January.
Hedge Funds
Hedge funds posted positive returns the first month of 2009.
WHY MY ABSOLUTE RETURN HEDGE FUND LOST MONEY ABSOLUTELY IN 2008
Hedge Funds gained in acceptance and popularity following the collapse of the tech bubble. During that downturn from March 2000 to March 2003, most strategies provided both absolute positive performance and relative outperformance versus the equity markets. The downside protection provided during that time helped to grow a cottage industry into a nearly $2 trillion business. Unfortunately, hedge funds did not provide that same downside protection in 2008. During the current bear market, they have posted double digit losses and experienced a net outflow of assets. Given the higher fees and lower transparency, many investors are questioning the hedge fund model and its place within a portfolio.
