2006-09-28 07:05:38 · 4 answers · asked by Abi R 1 in Business & Finance ➔ Investing
This is like asking "What is the difference between a supermarket and a restaurant."
Brokerages make their money by matching up different people who want or buy & sell securities. They charge a fee for this.
Hedge funds make money by investing -- making large bets on certain risks while taking offsetting positions in various securities to eliminate other risks. They usually do this with their own money & money from wealthy individuals.
2006-09-28 07:33:02 · answer #1 · answered by Ranto 7 · 0⤊ 0⤋
Stockbrokers typically are broker/dealers who buy large chunks of stock and then "push" them on their customer base at a profit. A hedge fund is usually incorporated overseas where the taxes are low in particular the Cayman Islands. They hedge for their customers in currencies, commodities, stocks, bonds, you name it their customers have some financial interest in it and they try to make sure they don't lose money on it. In other words hedging means betting against yourself so that you will not feel the pinch if what your trying to accomplish doesn't work out.
2006-09-28 14:20:09 · answer #2 · answered by scottdavidkuehne 1 · 0⤊ 0⤋
A Hedge Fund is a mutual fund that is (as of now) unregulated and invests high net worth client money. That means rich people! Investor money is pooled, like a regular mutual fund.
A regular "stockbrokers" firm can manage your account, but only your money, not in a pool.
2006-09-28 14:14:31 · answer #3 · answered by misternycboy 2 · 0⤊ 0⤋
A stockbroker firm consists of securites brokers/dealers who sell many kinds of investments. A hedge fund is a type of fund.investment.
2006-09-28 14:08:08 · answer #4 · answered by hirebookkeeper 6 · 0⤊ 0⤋