Hedge Funds Information and Service Providers in Stocks Futures Bonds Directory

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Hedge Fund Tips (Fraudulent Hedge Funds) in Active Trader Links Directory

A hedge fund may be regarded as an extremely hard-core mutual fund. Like a mutual fund, a hedge fund is a pool of money from multiple investors that is invested in diverse ventures in the hope of turning a profit. Here, however, the similarity ends. Compared to mutual funds, hedge funds are the James Bonds of the marketplace. They are relatively unfettered by government regulation, and they play bigger games, take bigger risks, possess an air of sophistication, use unorthodox methods, and have the power to capture the public imagination in a way that their lesser counterparts have difficulty approaching. The first hedge fund was started in 1949 by Alfred Winslow Jones, an Australian-American sociologist and financial magazine editor who decided to try his hand at investing. His unique investment strategy was to buy stocks with half his investors’ money, and sell short with the other half. Short selling a stock is betting that it will go down in value rather than up. By buying some stocks while simultaneously short selling others, Jones was in effect hedging his bets (hence the name.) If the entire market experienced a downturn, Jones could at least recoup some of his losses or ideally turn a profit. With hedge funds, the skill and luck of the manager became the only determining factor in how much money could be made, irrespective of the state of the market.

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