The past half-century witnessed the rapid democratization of credit and investment: Credit cards; mutual funds; 401(k)s. And the trend has largely been for the good.

Now hedge funds, the mysterious, secretive investment vehicle for the super-rich is opening up to the merely well heeled. In the 1980s and 1990s, hedge fund managers like George Soros became legends by gambling big and earning lush returns. Hedge funds also appealed to financial snobbery. Investing with a hedge fund titan meant membership in a discreet, exclusive club. Imagine the cache that came in the ‘90s from standing at a reception listening to others talk about their mutual funds, dot-com investments, and stock options, and being able to quietly murmur that your money was invested in a hedge fund.

What’s a hedge fund? The definition is fuzzy, but there are some common characteristics. Almost all hedge funds use a variety of sophisticated investment techniques. They’re organized as private partnerships. Money managers are typically aggressive traders, and they pocket a 1 percent fee plus 20 percent of the profit. Hedge funds—and this is key—are lightly regulated.

There are roughly 6,000 such funds in the United States versus some 880 a decade ago. Here’s a stunning number: The money flow into hedge funds last year was roughly comparable to the sum invested in equity mutual funds, although the latter business is 10 times larger.

The intense enthusiasm for hedge funds is rightly raising concerns that a bubble is in the making. Bubble or not, most people should avoid applying for membership in the hedge fund club. While the financial gunslingers will coin money, it’s doubtful their investors will do better than the Standard & Poor’s 500 market benchmark. Most hedge funds don’t with any consistency, and many hedge funds go out of business fairly quickly. My biggest concern is a lack of transparency. Remember Enron, anyone? Hedge fund finances are opaque, and vague reporting is an invitation for abuse as the industry rapidly expands.

The average investor hasn’t missed out on much by being barred from this club. Most individual investors would do far better parking their money in a boring, plain vanilla, broad-based global equity index fund managed by a computer. Put it this way: It’s not worth participating in every evolution toward greater financial democracy.