Thursday, January 29th, 2015

What is a Hedge Fund? Isn’t it just…?

Is not it just a hedge fund investment companies open only to high net worth clients using investment strategies such as high-risk trading options for super big profits?

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7 Responses to “What is a Hedge Fund? Isn’t it just…?”
  1. stevenalexaguilera says:

    dont get ivvolved with hedge funds, look at bernie madoff

  2. Shaun R says:

    Kind of, they are like mutual funds for high net worth people. I believe that these funds can buy and short stocks with margin, I don’t know if they can use options or not.

    But to be eligible you must meet a specific minimum income level and have a net worth of over $1 million dollars.

  3. Joseph P says:

    You have the basic concept idea correct however Hedgefunds do not need to be only for the high net worth investors. Usually they require a minimum deposit the same way mutual funds do, however most don’t require millions to start.

    If you are seriously interested in Hedgefunds however your best bet will probably be to learn how to trade options yourself. Why pay a management fee for something you could be doing yourself!

    Basic trading of options is simple once you understand how they work and the risks that are involved. Big profits can be made…and lost, so become educated on the topic. I’ve studied options for quite some time now and have been trading successfully along with stocks. The returns, if you are not to greedy, are quite handsome!

  4. options A to Z.com says:

    Hedge funds are usually open only to a limited range of accredited investors. They often charge hefty management fees — upwards of 20%. A hedge fund will typically create funds that are “hedged” which is normally done by short selling or by using derivatives. However, many funds have turned to using the short selling and derivatives as a way to increase the risk rather than the hedge the investments. But you have the basic idea; they are investment companies catering to high-worth clients who seek large profits!

  5. Rich says:

    In theory yes, but mutual funds also invest in these risky schemes. Thats why you have to pick a good fund company,

  6. tjfinvestor says:

    A hedge fund uses leverage to increase returns. And yes you are correct typically HNW individuals that are willing to invest at least $250k with a hedge fund sometimes in the millions or 10′s of millions.

    Hedge funds can perform well in both up and down markets depending on the investment bent of the hedge fund. They can also be stripped naked if they are on the wrong side of the market and highly leveraged.

  7. MR.QA says:

    no, hedge fund is just a less regulated fund.

    hedge fund isn’t always open to only high net worth clients, use high-risk strategies and make super profits. some hedge fund managers are safe, buys only in bonds, don’t return over 7% a year, don’t employ hedging strategy like shorts. hedge fund is just a fund with less regulations, that’s all. with less regulation, manager can employ more risky strategy is another story, but not necessary what a hedge fund is.

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