The world's wealthiest people, endowments and pensions have been investing this way for centuries and when it comes time for them or their advisors to pick the “best managers”, their preferred choices for public market investing are usually hedge fund managers. That should not come as a surprise. Hedge funds pay the most (the standard fee is 2% management fee annually plus 20% of the profits generated for investors) so they attract the best fund managers in the world and can pay for the best research. There are also less regulatory restrictions on hedge funds. Hedge funds have more latitude on how to hedge risk or use leverage and on what securities they can buy, how they are selected and what proportion of their portfolio is allocated to a certain position. Yet even the world's wealthiest investors also recognize the importance of diversification across managers and never put their eggs with just one manager or one investment style.
Stock market picks investing
Forex and stock traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. All traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new stock traders will try and fight the trend.
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