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Friday Charts: The World’s Worst Investors, Bernanke’s Legacy and Tragic Lies

Often imitated – but never duplicated – we’re serving up another round of our weekly charts.

Remember, the concept couldn’t be any more straightforward.

Since a picture can be worth 1,000 words, I try to zip my lips (well, mostly) and let some carefully selected graphics convey a few critical investing and economic insights.

This week’s gallery includes…

  • The No. 1 reason to steer clear of hedge fund investments…
  • The key metric that will influence whether or not the Federal Reserve ever stops printing money…
  • And the most misleading news of the week. (The truth shall set you free!)

So without further ado…

Hedge Funds Don’t Do a Portfolio Good

Hedge fund managers (still) can’t catch a break.

In early March, I noted how their performance was lagging behind the S&P 500 and (gasp) lowly mutual fund managers by about six full percentage points.

Well, fast forward two months, and now they’re behind by 10 full percentage points, according to the latest analysis from Goldman Sachs (GS)

For decades, we’ve been told to covet the high returns enjoyed by the few investors rich enough to invest in hedge funds.

But here’s the truth: We don’t need no stinking “exclusive” investments to earn top returns.

Boring, low-cost index funds like the iShares Core S&P 500 ETF (IVV) can get the job done just fine this bull market.

Why Ben Will Keep Buying

On Wednesday, fears surfaced that the Federal Reserve might take its foot off the quantitative easing gas pedal before the end of the year.

The news sent investors running for the hills.

Don’t join them.

Ever since Ben Bernanke took office, the U.S. economy has sucked wind.

As Bespoke Investment Group notes, “The US economy is in the midst of its eighth straight year where annual growth has been (or will be) below 3%.”

That’s the longest low-growth streak in the last 84 years.

With Bernanke’s legacy on the line, there’s no chance he’ll start “slowing the pace of [asset] purchases” until economic growth climbs out of its current rut. And I’m willing to bet that it won’t happen over the next six months.

Speaking of bets…

The Truth About Tragedies

This week, my prayers go out to all the Americans impacted by the deadly tornado in Moore, Oklahoma.

As for our elected (mis)representatives and so-called “experts” trying to capitalize on the tragedy by pushing their climate change agenda, shame on you.

Democrat Senator Barbara Boxer didn’t leave any room from confusion during her Monday floor speech when she said, “This is climate change.”

Well, here’s a nice tall glass of truth serum, Mrs. Boxer…

“There’s just one small, inconvenient problem with making a connection between climate change and an increasing frequency of violent tornadoes,” says Dr. Mark J. Perry of the American Enterprise Institute, “The link doesn’t actually exist.”

Over the last 50 years or so, the frequency of violent tornadoes in the United States keeps trending lower by about four violent storms per decade.

Yet, Michael Mann, a climatologist at Pennsylvania State University says, “If you’re a betting person – or the insurance or reinsurance industry, for that matter – you’d probably go with a prediction of greater frequency and intensity of tornadoes as a result of human-caused climate change.”

I’ll take that bet any day Mr. Mann! Just tell me how much you’re willing to wager.

That’s it for this week. Before you go, though, let us know what you think of this weekly column – or any of our recent work at Wall Street Daily – by sending an email to feedback@wallstreetdaily.com, or leaving a comment on our website.

Ahead of the tape,

Louis Basenese