Hedge funds have been under pressure from robots and index tracking models. Investors have been wondering why they are paying management fees to stock pickers who underperform a much cheaper model. Back in November, I wrote an article entitled “Are Computers About to Replace You?” where I spoke about defining your added value and how numbers are only part of the story, as well as computers not being able to predict catalyst events.
Many investors big and small are putting their money into Index Trackers. I was even cycling with someone over the weekend who mentioned that it was cheap to put their money into a tracker. Personally, I like these sort of signals, because once the small investor gets involved (in anything) it usually means its somewhere near the top (or the bottom) of the cycle.