chip and joanna gaines kitchen remodels ranch house remodel sunroom room additions spring grove house bump out mchenry county gateway residential remodeling .. Chicago Drug testing

Hedge Funds

You read and hear a lot about hedge funds. Unfortunately, most of what you hear is negative because it comes from the major media that has an interest in reporting negatives about them because the major media is supported by so-called standard mutual funds and brokerage companies that spend big bucks for advertising. Hedge funds are NOT allowed to advertise.

First of all a hedge fund is almost identical to a mutual fund. There have actually been fewer fraud complaints about hedge funds than about mutual funds. That doesn't mean they don't lose money just as regular mutual funds do.

The underperformance of mutual funds is not highlighted in the press; you don't bite the hand that feeds you. I'm talking about advertising revenues. Would Janus, Invesco, Vanguard or any big fund family continue to place advertising dollars with someone who told stories about their losing funds or recommended that investors sell them to find a better performer? Hardly.

Mutual funds use customers' money to buy stock and bonds. Hedge funds are not limited to what they can buy. The can buy or short sell derivatives, commodities, options, oil and gas leases, freight rates and even take an investor's money to the race track (although I doubt if they would). The managers of these funds are specialists in their field of knowledge and many do extremely well. Just because they are different doesn't make them bad. Like all investments you must know where your money is going and how it is going to be invested.

The one major difference is how the fund manager is paid. Regular mutual fund managers are paid on how much money they manage and NOT on performance. Hedge fund managers usually receive 1% of the fund assets that goes for expenses and 20% of the profits they make for their investors. In other words if they don't make a profit for you they don't get paid. I sure would like to see them do that in regular mutual funds, but the Securities and Exchange Commission is the captive of the mutual fund industry so don't hold your breath. The true ability of fund managers would be exposed and many funds would disappear as the smart investors would be transferring their money to fund managers who have winning records every year. Yes, every year. No more of the nonsense of how they beat the S&P500 by 5% yet lost your money.

So many of the hedge fund articles say the investors are being hood winked into putting money into these funds. I don't think so. Almost every big state and corporate pension plan, university endowment, charitable trust and other large financial plans have money in hedge funds. Like any cautious investor they did their due diligence to find out the track record and management capabilities of the hedge fund.

You have to be rich to put money into a hedge fund. They require an income of $200,000 per year and assets of one million or more. Many require large initial investments.

If you qualify they are definitely a better place than a regular mutual fund, but you must do your due diligence.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

In The News:

Risk Control

Everything you invest in has risk so you want to... Read More

Trade Stocks for Real

I read a comment by a forum member on another... Read More

Stocks & Oil, Sat Jun 18th, 2005

Both the stock market and oil prices rallied recently, which... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More

Where Is The Beef?

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

Why Stock Is More Risky Than Options!

You probably have been told that options are risky. Even... Read More

Hill of Hope

Just about now everyone is confused as to which way... Read More

Different Types of Mutual Funds

This is a guide to the different types of mutual... Read More

Investment Lawyers and Trash Stocks

The trash business in its efforts to cook their books... Read More

You Don?t HAVE To Be Trading

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

Trading For A Living

How many times have you said to yourself, "I'd like... Read More

What the SEC Really Thinks About Mutual Funds!

Let's go into the details of why non-indexed mutual funds... Read More

Investing in the Stock Market

From the book 'The Stockopoly Plan' by the author Charles... Read More

Dont Fight The Fed

One of the great truisms of Wall Street is "Don't... Read More

Stock Market Diversification

In one of my previous articles (Investing in the stock... Read More

What is a Trading Plan ? and Why You Need One?

How do you make money without picking tops and bottoms?I... Read More

Is The Bear In The Cage?

For the last few weeks we have seen the stock... Read More

Downdraft

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

How to Pick Winning Stocks

There is nothing more exciting than finding an undervalued stock... Read More

Choosing a Stock Broker

If you were to find that you had some severe... Read More

Bad News is Good News

For weeks, no, months we have been bombarded with nothing... Read More

A Personal Stock Market Investment Philosophy

∙ Make every investment in the stock market a long-term... Read More

What Does it Take to be a Stock Trader?

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

Some Good News for A Change

Before we get into all the good news out there,... Read More

Diversification

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

led commercial lighting fixtures roadway light poles Pete's produce ..
led commercial lighting fixtures roadway light poles Pete's produce ..