custom home remodeling winthrop harbor basement redo lombard hamilton remodeling hoffman estates addition to split level house bathroom reconstruction wheaton .. Chicago Drug testing

Hedge Funds: the Good, the Bad, and the Ugly

Alfred Winslow Jones started hedge funds in 1949. He was a pioneer of non-traditional investment strategies. "Non-traditional" categorizes hedge funds quite accurately. Hedge funds have the potential to make an investor quite a bit of money, but many do not understand the nature of hedge funds. Hedge funds have undergone skepticism because they do not have to disclose their activities to third parties.

Hedge funds can be quite profitable if an investor uses the best techniques. One technique is risk arbitrage. Basically, buying stocks in a company that is in the process of a merger and acquisition. Companies announce a specific price the day of the merger, so if the stock is under the stated value before the day of the merger, it is a relatively safe plan to buy and wait. This does pose some risk, because some mergers do not go through.

Hedge funds are very secretive and do not have to disclose their activities to third parties. This allows hedge funds to be free from the regulations that mutual funds have to adhere to. This can be considered as beneficial because fund managers will perform better because they see a direct profit from the success of the fund. In mutual funds, this is not so. Also, large companies can move undisclosed amounts of money and gain significantly without authorities noticing. Actual numbers are not known, but HFR (hfr.com) reported that at the end of the second quarter in 2003, there were 5660 hedge funds managing $665 billion dollars around the world. The sheer magnitude of this number is shocking, but demonstrates the massive profits that can be made from successful hedge fund strategy. Unfortunately for secretive businesses that enjoy the secrecy of hedge funds, the U.S. Securities and Exchange Commission is attempting to successfully implement the requirement that hedge funds be registered with the SEC. If this continues and is successfully implemented, then all of the advantages to secrecy will be lost.

One negative aspect of the non-regulation of hedge funds is the fact that there are no official hedge fund statistics. Most hedge fund holders are large companies and so little is knows about their financial movements. Hedge funds are based in offshore jurisdictions, making them seem even more suspicious. Unlike mutual funds that have a base in large cities like New York, Hedge Funds are based in places like Bermuda, Cayman Islands, and the Virgin Islands. It may seem strange to call your fund manager in Bermuda rather than to call someone in New York City.

Another negative aspect of hedge funds is their high price tag. Hedge funds seem to be more suited for large businesses and companies that are merging than they are suited for the average worker. Hedge funds usually require an extravagant amount of money for initial purchase. If someone does have the money, however, they can gain even more money with this sometimes high-risk venture.

Hedge funds have the potential to help an investor gain quite a bit of money. However, hedge funds undergo a great amount of scrutiny because of the lack of regulations and the general secrecy surrounding hedge funds. Hedge funds are based offshore and have been rumored to hold as much as $665 billion. Some reports even state that at one point, 39 firms were managing hedge funds worth $1.1 trillion. These startling numbers show that hedge funds can be quite lucrative.

Jenny Delinga is very interested in hedge funds. You can find out more about hedge funds at Hedge Fund Reader ( http://www.hedgefundreader.com ).

In The News:

A Triple Dipper: How to Make 3 Profits on 1 Stock Trade

This is a rather simple strategy with which I am... Read More

Invest In The Stock Market For The RIGHT Reason, Using The RIGHT Choices

Invest in the stock market for the RIGHT reason, using... Read More

Stock Market Volatility

In my opinion, due to the volatility of stock market... Read More

10 Tips For Creating Wealth From the Stock Market

1. Do not spread your money too thin.My friend has... Read More

Bottoms Ups

If you have talked to a stock broker or financial... Read More

The Information Age

It is wonderful to be alive in the information age.... Read More

Overvalued & Underbought

With all the bad news that has been dumped upon... Read More

Is Your Garage Full Of Junk?

I have a 2-car garage. There are nice shelves on... Read More

Emotional Trading

The single most expensive stock market trades are those made... Read More

A Stock Market Investment Strategy

I feel that an investment strategy in the stock market... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

Being Wrong Buying Stock is Okay

Being wrong is OK, but let's not carry it to... Read More

Stocks: Understand What You Buy!

"There is nothing more frightful than ignorance in action!" Johann... Read More

Making Outsized Returns in the Stock Market - Using the Dow Theory

The Dow TheoryCharles H. Dow... Read More

Where Is The Beef?

Where is the beef? Or maybe it should be where... Read More

Successful Trading ? Taking Profits - Part 1

So you're started trading, you bought some positions with your... Read More

Exchange Traded Funds Primer

Exchange Traded Funds (ETFs) are a group of passive index... Read More

Its A Bull, Its A Bear, Its Suptertrader!

The higher the market goes the more confusing are the... Read More

Online Investing & Online Stock & Share Trading: Difficulty in Taking Stop Losses in the Market

This is an extract of an article which was first... Read More

Why This Bear?

People are constantly asking me why is the stock market... Read More

Downdraft

For the year 2000 we have seen hundreds of mutual... Read More

Price Targets

Every day in any financial publication you will find the... Read More

Investing in Trash Company Stocks

Refuse is a serious issue in any society, about as... Read More

The Bottom?

Every day I hear someone on CNBC proclaim that "this... Read More

Stock Valuation using the SMP Model

Disclaimer: Please note that I do not necessarily purchase, own,... Read More

garage lights commercial street lights Pete's produce ..
garage lights commercial street lights Pete's produce ..