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The central bank’s move will buoy hedge fund managers’ returns, which have been crippled by a world awash in liquidity created by the Fed’s policy and broader global banking coordination. All that cash flooding the markets wounded the short side of the ledger as those stocks were propelled by the overall market’s rise. Thus, as monetary conditions normalize, investors’ portfolios should include hedge funds.

Here are some simple rules to remember about your assets—and our world:

No investor can predict the future. Few saw the financial crisis emerging in the calm of 2006 and since the crisis, many guessed wrong when anticipating such scenarios as hyperinflation, the coming boom in gold and the euro’s demise.

Moreover, who was bold enough to suggest that the crisis’ aftermath would spark one of the strongest bull markets despite relatively tepid economic growth? Future uncertainty requires, especially to those who adhere to modern portfolio theory, that some assets be invested in places that are non-correlated.

Avoiding permanent capital losses is mandatory. To do this requires reducing correlation in a portfolio. No asset class or hedge fund sector is ever the best place to be always. While some of us think we’re in the asset management business, we’re actually in the fashion industry. Sectors, categories and asset classes come in and out of vogue. So too, do the way those assets are managed.

Don’t believe me? How did a portfolio of only equities fare at the end of 1999 or 2007? Or gold at the end of August 2011? The most resilient portfolios that guard against permanent losses have more non-correlated exposures—and that encompasses hedge funds.

Cycles aren’t going away. It doesn’t matter if they are economic, business, equity market, interest rate, commodity or central banking intervention-and-regulatory cycles. Very simply, the most prudent investors will take advantage of the best and brightest managers who employ many varied investment tools.

Just look at the versatility of hedge funds. While mutual funds can be long or in cash, hedge funds can go long and short, participate in capital structure and risk arbitrage. They can access the derivative and futures markets and also press their cases through shareholder activism. As a result, hedge fund managers can work with maximum creativity. In a world filled with a degree of uncertainty and a permanent cyclical nature, why imperil a portfolio by leaving the most sophisticated and skilled on the sidelines?

The world shifted after 2008 when governments got more involved. Governments, politicians and policy makers get more involved, not less, after a crisis. Many free-market proponents rail against what the government and the Fed did post-recession. It’s time to get over it and focus on what’s really happening. The intervention, welcome or not, has made our world less predictable.

We also confront a historical first. We are onboarding 2.5 billion people into the Western capitalist, consumer-based economy. They’re in India and China but also East Africa, parts of Latin America, and South East Asia. This phenomena is distorting prices and labor markets and creating excess factory capacity and goods and services. This, principally, is why the specter of deflation has emerged. It makes the world and investing far less certain.

Governments favor controlling the uncontrollable and they’ll continue manipulating things. Therefore, sheer prudence requires that a portfolio include hedge funds chosen by managers who adjust quickly to this uncertainty.

While the industry will continue to grow for all of the above, there are valid reasons for the media cabal of negativity toward hedge funds. They are fee generating machines for the general partners where, in a low interest environment, they have taken the preponderance of the return for themselves over their investors. The industry indices certainly seem to tell that story but further analysis is needed to get to the truth.

The Fed policy since the crisis has crushed the long/short managers as their short books have screamed upward and has also interrupted the macro managers’ playbooks with its $4.5 trillion balance sheet. These two groups represent more than 50% of the Hedge Fund Index so the cursory examination is valid. However, the brightest allocators have avoided these strategies. There is in fact a substantial dispersion between good and bad hedge fund managers. The top decile managers from January 2002 to December 2012 compounded their return at 23%. There are all stars in every industry and we believe these all stars will continue to thrive and attract capital.

Moreover, as the central banks begin the process of normalizing their monetary policy, price discovery will return to all asset classes. Let’s face it: the Fed’s aggressive interest rate policy has pushed all assets up without discrimination to superior or inferior fundamentals. We predict that this normalization of policy will help the long short and macro managers. The irony here is that investors like Calpers are leaving at exactly the wrong time. We believe that we are closing in on the inflection point of a new cycle.

While a perfect strategy doesn’t exist, generations of investors have been served well by a diversified investment plan. “The difficulty lies not so much in developing new ideas as in escaping old ones,” the noted economist John Maynard Keynes ventured.

Don’t be entrenched in today’s mantra against hedge funds. The world may be an uncertain place but, for hedge funds, their best days are ahead.