Forget Hedge Funds, Invest In Penny Stocks!
You probably saw the recent lottery news. Three hedge fund managers won a $254 million jackpot.
Hedge fund managers? Really?
As if those guys need more millions
Actually, buying lottery tickets might not be the worst hedge fund strategy after all. Most hedge funds (whose managers didnt win the lottery) lost money in November. In fact, hedge funds are having a subpar year across the board.
In November, hedge funds lost 1%. Year to date, their losses jumped to 4%. And while hedge funds fared better than the overall market last month, theyre getting creamed for the year.
In comparison, the Dow Jones Industrial Average is up roughly 5% on the year while the S&P 500 is up 1%.
So basically, you couldve bought an index ETF or index fund for a minimal fee and be up for the year. Or, you couldve invested in hedge funds and paid exorbitant fees just to lose money.
Keep in mind, most hedge funds charge 2% on assets under management PLUS an additional 20% of gains.
Hows that working out?
Hedge fund managers are supposed to provide top-notch, expert advice you cant get from normal mutual funds or financial advisors. But some of the best returns Ive seen from hedge funds this year are from lottery winnings!
It seems the European debt crisis is hurting most hedge funds both in terms of volatility and liquidity.
To all you hedge fund investors dont worry. I have a better idea.
Buy penny stocks!
Weve seen several huge penny stock winners this year. Despite challenging market conditions, plenty of small companies are knocking the cover off the ball.
In fact, just about every day youll see at least one 100% or more winner in penny stocks. And these are usually legit companies not some pump and dump scheme.
Solid, well-run penny stock companies can thrive in any market. Since theyre too small to receive analyst coverage or be included in stock indices, they often arent highly correlated with the overall market.
And during these tough market conditions, thats great news for penny stock investors. Just ask hedge fund managers if they arent too busy standing in line for lottery tickets.
Yours in profit,
Gordon Lewis
Category: Investing in Penny Stocks, Penny Stocks to Buy
