(CNBC) Forward-thinking investors understand the benefits of rebalancing portfolios ahead of changing market conditions. It is intuitively obvious and yet incredibly difficult. Looking at just the past 20 years, many investors were significantly overweight equities in 1999 and again in 2007, only to endure two massive drawdowns. Few investors want to question why a certain strategy is so successful, much less question when a successful strategy will stop working.
Today it’s the passive, long-only, daily-liquid products luring investors into a sense of eternal success. Other strategies, including hedge funds, have taken a backseat. So why, then, might now be a smart time to add hedge funds?
