Long/short is obviously just one strategy in the hedge fund realm and clearly there is no way to know what future results will be but the return and volatility numbers reported in the chart would seem to say that this space should be investigated further if you have not been using some form of hedge fund replication as part of your strategy for diversifying your equity exposure.
Taking some sort of defensive action or otherwise employing some sort of tactical shift in the portfolio as I described above and have been writing about since I started the blog will not be suitable for everyone but my experience with this has been good enough to still believe in it. Whenever the next decline comes not every possible strategy will “work” which to me is an argument for several different alternative strategies. The equity market is still doing well which makes now a good time learn about this subject.
*Morgan Creek Capital is the sub-advisor for the AdvisorShares Morgan Creek Global Tactical ETF (GTAA)
AdvisorShares ETF Strategist Roger Nusbaum wrote this article.