Back during the dotcom collapse of 2000, I was losing money in the stock market like a champ. I was a second-year financial analyst who had a serious case of confusing brains with a bull market. When I turned to my VP and told him I was still bullish about the stock market, he almost slapped me upside the head. “We’re in a bear market, son. Get used to it and stop dreaming!”
After losing about 30 percent in my after-tax portfolio, my dreams of stock market riches finally faded. I cried “uncle” and moved my money into more conservative investments. The funny part was that my 401k was actually up in 2000 and in 2001 because I had allocated 50 percent of my assets into a hedge fund called Andor Capital Management that went short the market.
Normally, only accredited investors — those who earn $200,000 a year or more or who have a net worth of over $1 million or more (excluding their primary residence) — can invest in hedge funds. But my firm had a partnership with Andor that gave us peons access to invest as well.