specialising in macro trading strategies like this are any sort of proxy for that, then that was possibly the big one to avoid.
Hedge funds, who typically charge the largest fees, have had another miserable year with average returns of just 4.3 percent -- according to Hedge Fund Research – but average macro strategies are actually down 1.3 percent year-to-date.
So what are the lessons for those looking at weeks of fiscal cliff angst stateside? Playing the panics and second-guessing daily trends doesn't appear very fruitful in this environment.
Avoiding U.S. assets altogether is much less of an option, not least because global markets tend to correlate more highly Wall Street gyrations anyway. The temporary safety trade of U.S. Treasuries looks the easiest call for the risk averse but only for those who are increasingly yield averse too. Mainly for those in search of temporary bunkers during thinning year-end markets anyway, this week's moves show that strategy is the default move.
But if, just like opinions on euro zone survival, you believe the U.S. cliff will ultimately be avoided by some form of compromise, then many may simply close their eyes to the headlines and day trades and look at equity market lurches like this week's as potentially big buying opportunities.
And that appears to be where most asset managers appear to sit -- whether that's a complacent consensus or not. The fiscal cliff may turn out to be just a distraction. If just a short-term solution is found to the problem, markets should recover fairly quickly, said Dan Morris, global strategist at JPMorgan Asset Management.
If tough negotiations lead to a drop in equity markets that should be viewed as a buying opportunity.