The original idea of a “Hedge Fund” was that in addition to buying stocks hoping for rising prices, the Hedge Fund managers would also buy futures contracts/puts/calls as “insurance” or “hedges” against falling prices.
By balancing these two ideas the large number of Hedge Fund customers were to gain something like 3% less yield than the total market long term yield, but 90% of the time never have a loss.
This present drop of less than 4000 points on the DJI from 28,000 is just a bit more than a common place “correction” but are there any Hedge Funds that have used the original idea to at least stay at zero loss?
For comparison the average yield of large USA pension fund managers over the last fifty years has been about 6% above the inflation rate.