This essay sheds light on the top reasons why you should never invest in a hedge fund and also elucidates the advantages and disadvantages to investing in a hedge fund. Moreover, how to strategically invest in alternative investment vehicles without investing in a hedge fund and how to make substantial money so that you can afford to invest in a hedge fund is delineated in this essay. There are ample reasons to why you should desist from ever investing in a hedge fund. The crux of the issue with hedge funds is that they present considerable risks to investors and are characterized by high levels of volatility. This is because, hedge fund manager manages are highly risk tolerant and do not succumb to loosing any of their own money in the event that the hedge funds they manage loose money. In other words, if the hedge funds' positions elicit a capital loss, it does not cause the hedge fund manager to loose a penny of his own money. Hedge funds are unappealing to conservative investors. Hedge fund managers invest aggressively and heavily invest in derivatives. Derivatives are deemed to be eminently risky asset classes due to leverage. "Options must be delivered within a certain window of time. If a 'black swan, ' or completely unexpected, economic event happens during that time period, even if the manager is correct about the long-term trend, he could lose the investment. In that sense, hedge fund managers are trying to time the market, which some would say is very difficult, if not, impossible to do" (Amadeo, 2019). Investing in derivatives increases the highly volatile hedge fund to even higher increased risk exposure. Moreover, in stark contrast to mutual funds, hedge funds are not regulated and therefore lack oversight from the Securities and Exchange Commission. Hedge fund investors are highly prone to even loosing the entirety of "their investment if the hedge fund goes bankrupt as a business, even if the investments" (Amadeo, 2019) perform well. Hedge funds charge their investors lofty fees which renders them even more unappealing to investors as investment vehicles. Hedge fund companies levy both a performance fee and management fee against their investors. The management fee is typically 2% of the hedge fund's net assets. The performance fee is generally 20% of the investor's annual net profits. Unfortunately, much to the dismay of prospective hedge fund investors, an exorbitant amount of hedge fund firms have become defunct in recent years due to succumbing to egregious capital losses. The lofty risks and cost prohibitive fees associated with investing in a hedge fund unequivocally renders it an unattractive investment vehicle for investors, especially for fee sensitive, conservative investors who would prefer to not gamble with their hard earned money.In spite of the deterrents to invest in a hedge fund, there are a myriad of advantages appertaining to investing in a hedge fund. Fire and foremost, hedge fund managers are inclined to diversify the hedge fund's investment portfolio in order to mitigate against risks. This allows the hedge fund investor "to obtain instant diversification in a portfolio of investment. This is particularly beneficial for the investors with a larger basket of hedge fund portfolio but too small to achieve proper diversification" ("What Are The," 2019). Hedge fund investors have a proclivity to invest in a slew of different types of assets classes, such as bonds, equities, and derivatives, that can be impacted by certain specific risks."By focusing on some certain specific risks, the funds reduce the risk exposure by 50% to the general market movements. This is made possible by specific risk targeting. The hedge fund could produce a stream with a lower correlation level and a lower downside volatility than general risk assets like the equities" ("What Are The," 2019). In other words, by making investment decisions primarily based on certain specific risks, the hedge fund can reap lofty c