Key Takeaways
- • Jim Cramer says his former hedge fund returned 24% a year over 14 years after fees, roughly triple the S&P 500's 8% return.
- • Cramer rejects the strict efficient markets hypothesis, yet he still calls index funds the best choice for most investors.
- • In a Mad Money segment, Cramer advised a caller on the finances of the caller's retiree girlfriend, reinforcing his case for index investing by retail savers.
Summary
Mad Money host Jim Cramer says his former hedge fund returned 24% annually over 14 years after fees, about triple the 8% return of the S&P 500 over the same stretch of time. The comparison is a notable one for a manager who has spent years outperforming the broad market, though the figures are presented as Cramer's own account of the fund's track record.
Despite that record, Cramer rejects the strict version of the efficient markets hypothesis, which holds that asset prices fully reflect available information and therefore cannot be consistently beaten. He nonetheless concludes that index funds are the best option for most people, a position that reflects the difficulty most individual investors face in sustaining above-market returns after costs.
Cramer also addressed a caller's question about a retiree girlfriend's investments, using the exchange to argue that retail investors without the time or resources for active management are generally better served by low-cost index exposure. The Mad Money segment was also covered by BeInCrypto under the headline "Cramer Beat the S&P At His Hedge Fund But Advises Retail to Join The Index."
Despite that record, Cramer rejects the strict version of the efficient markets hypothesis, which holds that asset prices fully reflect available information and therefore cannot be consistently beaten. He nonetheless concludes that index funds are the best option for most people, a position that reflects the difficulty most individual investors face in sustaining above-market returns after costs.
Cramer also addressed a caller's question about a retiree girlfriend's investments, using the exchange to argue that retail investors without the time or resources for active management are generally better served by low-cost index exposure. The Mad Money segment was also covered by BeInCrypto under the headline "Cramer Beat the S&P At His Hedge Fund But Advises Retail to Join The Index."
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