A hedge fund is unlike other investment vehicles in that it participates in a diverse and wide-ranging set of assets and strategies that many traditional funds cannot. A hedge fund has an investor base comprised of large institutions, like pension funds and extremely high net worth individuals. A hedge fund can deploy many different strategies, including short selling, arbitrage, leverage and quantitative driven algorithms.
The goal of a hedge fund is to deliver absolute returns regardless of the overall market’s returns. They can deploy any tactic that a particular hedge fund believes gives them an edge, whether it is a market-neutral strategy, event-driven, directional, commodity-only fund, currency derivative fund, or a combination of them all. The hedge fund industry is estimated to have over $1.0 trillion in assets.
Let’s face it: investing isn’t easy, and it becomes even more discouraging when investors face losses in their portfolio. To avoid a drawdown in their portfolio, investors should avoid the following five mistakes. 1. Not having an investment plan Investors should have some sort of plan put together before they even jump into the world of investing and start allocating their portfolio to different investments. Having a plan guides them in what kind of investments they should be making and the risks they should ... Read More
Retirement confidence seems to follow the trends of the global economy. At least, that’s according to one recent survey that looked at 12,000 workers and retirees in 12 European, North American, and Asian countries, including France, Germany, Hungary, Japan, the Netherlands, Poland, Spain, Sweden, China, the United Kingdom, the United States, and Canada—making this one of the largest studies of its kind. The study found that 65% of the participants believe futur ... Read More
There’s often a debate among Main Street investors that institutional investors—more specifically, hedge funds—can provide better returns compared to managing the money by themselves. The main reason for this is that institutional investors have resources: for example, access to data, the ability to perform in-depth analysis, and so on and so forth. Last year was a good year for equities. The key stock indices like the S&P 500, the Dow Jones Industrial Average, and the NASDAQ Composite index registered gains between seven percent and 13%. In the same time, according to Hedge Fund Research, Inc., hedge funds posted an average gain of only 6.2% in 2012. (Source: Farrell, M., “Hedge funds ... Read More
When it comes to the world of investing, it is often said that a rising tide raises all boats. The idea behind this is very simple: if a stock market, or any other market for that matter, is experiencing a bull run, an investor who is bullish will make money. A good example of this phenomenon would be the “dot-com” period, when investors made money on whatever they bought—even the companies that didn’t even have any revenues. Unfortunately, all parties must end. The dot-com bull run ended, as well, with the NASDAQ falling from its all-time high of 5,000 to below 1,200 in the period from 2000 to 2002. Warren Buffett explained this phenomenon best. He said, “Only when the tide goes out do you discover ... Read More