You’re going to want to sit down for this: CNN Money reports today that—are you sitting down? Seriously, sit down—having a pile of money will not make you taller, smarter, or luckier (it may still increase the odds that you’ll be rich enough to hire an indigenous pool boy named Eduardo, though, so relax and put down the gun for now). A poll by U.S. Trust reveals that three out of four wealthy investors find that hedge funds “are difficult to investigate and that it is difficult to find a good fund.”
The study showed that actual, inanimate piles of money don’t have brains or the human-like capabilities to say, “Invest me in a SAC or a Rennassaince or something, but please, no Amaranths.” Underscoring this idea, CNN noted, “a huge bank account alone is no help in identifying potential winners,” which is really quite stunning, considering the fact that Keith’s bank account brings him breakfast in bed, waxes his car, and rotates his tires. (Cough, overachiever, cough). What we think they’re getting at is that being rich is hard; a pretty tough pill to swallow. Especially if you have some sort of sick and twisted need to stay rich ("These people earned their money, and they now hate to lose it").
And if your bank account does happen to have such magical funding-picking capabilities? The hardships still aren’t over. As Paul Napoli, U.S. Trust’s vice chairman told Reuters, “Wealthy investors [also deal with being] daunted by hedge funds' high minimum investments, high fees and lack of information on how the money is invested.” WILL THIS SUFFERING EVER END?
Wealthy stumped by hedge fund picks [CNN Money via Dealbook]