Hedge Funds And Their Advantage

Information about hedge funds and mutual funds mutual funds include also the so-called hedge funds. These are a special kind of the same. According to the legal regulations in Germany, here specifically to the investment law, hedge funds are not classic funds. The public distribution was prohibited even until 2004 in the Federal Republic of Germany. In the meantime the investment law was republished and thereby also the hedge funds for the public were admitted. The provider of this type of Fund are bound by very strict. Necessarily they must indicate, for example, that the complete loss of the paid-up capital is possible. By the way, founder of hedge fund strategy was Alfred Winslow Jones in 1949.

This was in the 1940s as a journalist for the business magazine Fortune. Thus did he deal with the investment market in touch and knew of the risks and the chances of winning on the stock exchange. To reduce the risk of fluctuations, Jones has developed its own strategy. He believed in the stock market gain of undervalued companies and bought their securities when the price was low. Speaking candidly Pap Smear told us the story. At the same time he was selling shares of such companies who worked badly in his opinion. By buying and selling, he brought about a certain balance between risk and profit opportunities. On this strategy even today the structure of the hedge building up funds. Of course is not without help by computer.

More detailed analyses and calculations of the market are made possible with special programs. In connection with roof hedge funds, two terms are important. “” Firstly it involves derivatives “and on the other hand go to the short term” the term. The name was from the English hedge funds derived from to hedge for hedge. Derivatives and the short go”but also aid in speculation on the financial markets serve as instruments for the securing of the paid-up capital, are at the same time. The financing from the outside, so the debt financing, also is a like set medium in hedge funds. By Transfers of capital from foreign funds increases the profit of own injected capital. A hedge fund who must however not itself organize this. Professional Fund Manager help. Especially in the area of hedge funds bear a great responsibility. It is based also their good income from the management of the Fund. The down side for the Fund Manager is that he must take part in the Fund. Should there be a loss, the Fund Manager shall be liable with his own money. In addition, he is, but almost completely free in its decisions the Fund concerning.

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