siding options cement board siding kildeer replace siding hardie siding harvard soffit installation lincolnshire .. 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:

The Top 10 Reasons to Invest in Mutual Funds

Everyone who follows the financial news has heard of mutual... Read More

Selection Vs Direction

As I have said many times before in this column... Read More

Is Your Garage Full Of Junk?

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

Economists

In today's volatile and confusing stock markets everyone is searching... Read More

Low Expense Ratio

One of the big advertising kicks today from mutual funds... Read More

Again With the Bubbles?

A few years back ? it seems like an eternity... Read More

The Problem With Hedge Funds

Are hedge funds a suitable investment for you? Hedge funds... Read More

You Don?t HAVE To Be Trading

As a novice trader, you'll often feel the need to... Read More

How to Read an Annual Report

Every publicly traded company is required by the SEC(Securities and... Read More

The Stock Market - Part 1: Believe It Or Not, Its Always Been Your Best Friend And Always Will Be

Regardless of the fact that the world's stock markets have... Read More

Emotional Involvement

I'll bet with almost anyone that has stocks or mutual... Read More

The Skinny on Mutual Fund Investing

Mutual fund investing is a lot like Thai cooking. Everyone... Read More

Oil Stocks CHK WLL - What Is Their Worth?

(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More

Exchange Traded Funds Primer

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

Municipal Bonds

Because there are so many stocks that are NOT paying... Read More

Cash Is A Position

I go to the Money Show every year to visit... Read More

Stock Trading Diversification

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

Starbucks Stock is Up

Starbucks earnings are up again and so is their stock... Read More

What Does it Take to be a Stock Trader?

It takes a total mental commitment to the task. It... Read More

Take The Time

You must take the time once a month to review... Read More

Stock Market Investing: Knowing When (and when not) to Sell

One of the greatest challenges of investing in stocks is... Read More

Making a Stock Watch List

I am taking the time to help others learn the... Read More

Mutual Funds are Dead

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

Managing Investing and Stock Market Risks

Reduce your investing and stock market risks by:Setting your sights... Read More

My Neighbor Got A New Car

I don't know what kind it is, but I saw... Read More

induction cobra head led manufacturers usa Pete's produce ..
induction cobra head led manufacturers usa Pete's produce ..