Friday, January 27, 2012

What You Should Know About Investing In Hedge Funds ? Centired ...

A hedge fund is actually a kind of investment which participates in a wide variety of investments and trading activities when compared with other types of funds. Nonetheless, hedge funds are available to a particular class of investors as specified by regulators. Every person can?t invest in these types of funds. Only specified investors can put their funds in them. Institutions such as university foundations and endowments, pension funds, or individuals with high net worth are permitted to make investments. The money invested in a hedge fund is utilized in a varied range of investments. However, liquid securities are the most typical investment that is usually traded. These funds follow different trading strategies like leverage and short selling in an effort to improve the return on investment.

The investment value of the investor in a particular fund is determined by his actual share of the net asset value of that fund. As a result, the increase and decrease of the value of the fund?s assets plus the fund expenses are reflected in the amount that an investor can take out later.

The tactics of hedge funds are intended for achieving positive return on investment, despite whether the markets are falling or rising. The fund managers are professional and very well qualified in handling finances and investments. They are given a management fee to compensate them for their expertise in addition to a performance fee if the value of the fund increases during the year. Investments worth billions of dollars are invested in these funds. According to one estimate, the size of the worldwide hedge fund industry is about 2 trillion US dollars and it is predicted to grow quickly in the coming years.

Considering that these types of funds aren?t open to the general public, there are actually minimum constraints with regards to investment and the strategies involved in management of these funds compared with funds that are available to the general public. That is the key reason why these types of funds have a lot of flexibility to participate in a diverse variety of investments and trading activities.

Men and women with large sums of cash to invest and are also ready to take big risks prefer to invest in these funds. Because the risks concerned are higher, investors can lose their entire investment really quickly. Similarly, these funds promise massive return on investment and investors can even double their money quickly. As a result, people who love to take risks to generate higher returns prefer to invest in these funds.

Investing in hedge funds offers a very good chance to make big gains in a short time period. However, the risks are just as high. Considering that the funds are professionally managed, these funds promise higher return on investment in spite of the risks related to investments and trading activities.

Are you looking for information on the best hedge fund managers? Be sure to visit Insider Monkey for information on David Einhorn and George Soros.

This entry was posted on Thursday, January 26th, 2012 at 5:22 pm by Jeremy Winters and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

Source: http://centired.com/2012/01/what-you-should-know-about-investing-in-hedge-funds/

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