Investors must not be too trusting

The news that the hedge fund manager John Meritwether is launching his third fund after having produced disastrous results with his first two funds has caused quite a stir. He may only be a good salesman but there still have to be some willing investors. But I suspect that not many REAL investors will sign up for Meriwethers's new fund, - it will be mostly 'advisers' who will put their 'clients' into the fund or their fund of funds. These intermediaries do not risk their own money but pocket juicy fees and real end investors should take care to take independent advice on the suitability of investments rather than be too trusting.