[chronic2021]

If you cherry pick the US S&P (over international, and over small cap), I’m allowed to cherry pick hedge funds.

Many funds consistently outperform the S&P by 2-3X over 30-40 years. Minimum investment, $5-10M, of course.

Buy and hold is the best option for those under USD $10 million net worth, but you must acknowledge there are semi-closed funds/prop trading firms that consistently beat the market.

[dasil003]

Yes, just like there are individual stocks that beat the market. How do you pick them?

[orojackson]

Stop being poor so you can go into those badass hedge funds that always beat the S&P 500 /s

But seriously, I'd rather just put money into VTI and VXUS and go back to playing video games, planning a D&D one-shot, programming a bit, or hanging out with friends in my spare time. Let the active traders waste their time poring over 10-Ks and/or charts. I'll be here having fun and taking what the market gives.

[chronic2022]

> Yes, just like there are individual stocks that beat the market. How do you pick them?

The same way you picked your passive index fund: look at 20-30+ years of data.

Unfortunately, VTI, VT, VOO all underperform the top hedge funds, when evaluated over 20 years (risk adjusted return, downside deviation, and absolute return). I’d go further back but VTI was created in 2001 whereas the hedge funds were created in 1980/1990.

[dasil003]

I picked S&P because it's one of a handful of widely reported indices and it was created roughly in the same era as the original vanguard index fund, not by cherry-picking data.

Your statement that major index funds all underperform the top hedge funds is tautological, of course the ones that beat the averages are the top funds. What I'm genuinely curious is: how many hedge funds were there in 2001 and how would you identify the top ones?

[orojackson]

Simple: don't be poor and know people (/s).

The other important question is whether a retail investor can join it. I know someone like baobabKoodaa [1] would shout from the rooftops, "You're moving the goalposts, grandparent, waaaaaaaaaaah!" Well, I'm not grandparent, so my goalposts are completely different from theirs.

My goalpost is whether a retail investor like me can get in on those high-flying funds. If not, then in the retail universe, they may as well not exist. Thus, I'm better off investing in VTI/VXUS and using the rest of my spare time coming up with some funny ways to challenge my party in a D&D one-shot.

[1] https://news.ycombinator.com/threads?id=baobabKoodaa