2007-08-06 10:44:59 · 6 answers · asked by Anonymous in Business & Finance ➔ Investing
a weakly regulated investment partnership.
all individuals who are members of such a fund must be 'exempt' individuals, entities, or couples under the SEC regulations. [Worth over 1 million, etc.]
the partnership may invest in anything its charter permits ... stocks, bonds, mortgage passthroughs, futures, options, forward contracts, forex, commodities, gold, or even diamonds or stamps -- if the charter permits that.
some hedge funds use leverage [debt or the equivalent] to permit them to get more return for the investor's dollar. Naturally, this entails more risk.
all hedge funds have a sponsor. the sponsor acts as the managing partner and may, if the contract permits, receive more than his pro rata share of gains, and/or a fixed percentage fee for being the manager and determining the strategy to follow at this time (which may change, of course).
as you'll have noticed, many of the Wall St. investment banks have sponsored hedge funds. It looks like two of Bear Sterns' funds went bankrupt and at least one more is having difficulties.
The possibilities (different bets) a fund might be able to make have been increasing in the past decade rather quickly as more and newer financial instruments are invented.
rather naturally, regulations haven't kept up with all the possibilities. And, there is some question as to whether we need to have many regulations at all -- after all, the persons who might be protected have all said that they are rich and, therefore, can afford to hire professional advisors.
does this help?
2007-08-06 11:01:36 · answer #1 · answered by Spock (rhp) 7 · 0⤊ 0⤋
It is an investment fund typically open to investors with a lot of money (there are severe minimum invetsment restrictions to isolate non-wealthy individuals). They are usually exempt from any direct regulation by the SEC, NASD and other regulatory bodies. They normally hedge their investments against market downtrends using derivatives and other investment instruments like swaps, short selling etc.
2007-08-06 11:03:16 · answer #2 · answered by hi5 2 · 0⤊ 0⤋
i be conscious of what you recommend. the coolest previous days are any time that looked easier or extra useful. For us, which could recommend the 50's, or early existence, or final week. yet you're proper, there became no time in human historic previous that became perfect, that we can seem back on as some thing being completely good. we adore areas and products of "the coolest previous Days". people many times finally end up ignoring that those undesirable issues ever occurred. in this one occasion, i think of that could be a case of collective optimism for the previous, of focusing on the coolest instead of the undesirable (which i think of runs opposite to human nature in maximum different respects).
2016-12-15 07:32:18 · answer #3 · answered by Anonymous · 0⤊ 0⤋
it is a collection of individual stocks that leverages itself to make money for the investors. Like any investment, you should read all about them first and never invest unless you can explain what the comapnyt or in this case the fund does.
2007-08-06 10:49:40 · answer #4 · answered by Domino 4 · 0⤊ 1⤋
A Mutual Fund that can sell short stocks.
2007-08-06 13:18:31 · answer #5 · answered by Anonymous · 0⤊ 1⤋
Hi, i recommand you a good and basic tutorial for investing. it covers all Issues related to your Investing and everything around it.
http://www.investingtutorial.info/
wish it will help you.
Good Luck , Best Wishes!
2007-08-06 15:29:32 · answer #6 · answered by Anonymous · 0⤊ 0⤋