Given the evidence, the only logical explanations I can think of for the continued popularity of hedge funds are that either investors are unaware of the data, or that individuals invest in hedge funds for the same reasons they buy a Rolex or carry a Gucci bag -- they're expressions of status, prestige, exclusivity and sophistication. Letting emotions such as these determine investment decisions is a recipe for transferring assets from your wallet to those of the purveyors of products.
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