Why invest in hedge funds? The answer is simple: it increases the probability to earn higher return on capital while lowering the risk of the loss.
Hedge fund is an instrument that allows to gain profit from both rising and falling or stagnating market at any level of volatility, thus ensuring a competitive advantage in comparison to the classic investment portfolio, mainly based upon the rise of prices of securities, commodities etc. At constantly growing stock market many investors did not see any need in alternative investments. But the history has shown many examples when this strategy was disappointing:

Index Dow Jones Industrial (1920-1940)*

Index Dow Jones Industrial (1965-1995)*

Index Nikkei 225 (1989-2008)**

It’s important to comprehend that even at a constantly growing stock market hedge fund ensures more efficient management in periods of corrections, granting additional profit opportunities.