painting aluminum siding best siding vinyl siding cost barrington hills siding calculator best siding .. 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:

Never Lose Money

Never lose money in the stock market again. Yeah, I... Read More

Value Investing: Selecting From The Bargain Bin

Picking a beaten-down stock requires a different kind of selection... Read More

Picking Mutual Funds to Outperform the Market

With over 6,000 mutual funds available, it may be tempting... Read More

The Stock Trading Plan - Why You Must Have One To Trade Successfully

This is the continuing story of our two imaginary traders,... Read More

Trading as a Business

What can I expect to make my first year of... Read More

Analyzing Growth Stocks: An Important Focus For Any Investor

Analyzing growth stocks is an important focus for any investor.... Read More

Trading Tips No 5: Stock Trading Curve Drawdown and Commitment

All stock trading and investing methods must deal with the... Read More

Stealth Bull

If you have been watching the stock market at all... Read More

Mutual Funds are Dead

You may have wondered why your mutual funds have been... Read More

Getting Even

I know there are a lot of you out there... Read More

The Golden Goose is Sick

It is finally catching up with them. The brokerage companies... Read More

Diversification

Wall Street's watchword has always been diversification, but what does... Read More

Never Fall In Love!

Recently I watched my favorite football team lose a vital... Read More

Different Ways of Buying Stocks

Let's say you are interested in this one company. You... Read More

Can?t Stand The Heat

It seems that every day I turn on the TV... Read More

Buying New Issues

Has your broker been calling you recently with the "great... Read More

Why Is The Macedonian Stock Exchange Unsuccessful?

The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More

Trading Baskets II: The Crapolio, A Roll of the Dice in the Stock Market

In a previously written article, we expanded the use of... Read More

Adding Funds

Someday you may want to retire and continue to live... Read More

Market Psychology

Today we are inundated with tons of information about the... Read More

401K-itis

Are you one of those many people who dread reading... Read More

Look Out The Window

Quick, look out the window. It's raining. No, the sun's... Read More

Trading Systems

To become a successful trader you must have some kind... Read More

How Eating Bitumen Made Me a Better Trader

Trading is a fascinating activity.There are so many layers to... Read More

Lemmings Are Gathering

Before they go over the cliff to their destruction these... Read More

led parking lot fixtures street light company Pete's produce ..
led parking lot fixtures street light company Pete's produce ..