Hedge Funds vs. Big Banks

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Are big banks  really better?

Your money is safer in a hedge fund than a big bank.   – Robin

There is a persona that big banks are safer than hedge funds. However, I want to argue the contrary. Big banks are run by people that don’t care about you or your money. Wise decisions or not, they still get paid. They put your money at risk with no second thought about what you want to do with your money. We all remember the gross negligence by big banks that lead to the 2008 financial crisis. If it wasn’t for the government bail out a lot of people would have been out of luck if their bank failed. On the flip side, hedge funds are usually run by an owner and the owner typically has a lot of money tied up in the fund. Hedge fund managers have skin in the game and personally I would rather see someone with skin in the game managing my money because they don’t  make money unless the investor, me, makes money. So ask yourself, do I trust the government to bail out my bank? OR do I trust someone who is also risking their own money to help make everyone invested succeed?

 

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