What is a “hedge fund?” Well, simply put, a hedge fund is an investment company that invests in alternative investments (debt, derivatives, options, commodities, etc.) to either beat the market or provide a hedge against unforeseen market changes. Generally, hedge funds are considered to be opportunities for the “smart money” and to sophisticated investors, such as institutions and individuals with significant assets.
Lately, you may have noticed frequent commentary on hedge fund manager and billionaire investor Bill Ackman. Since Dec. 2012 the S&P 500 is up 55.2%. Meanwhile, Pershing Square Holdings (Bill Ackman’s hedge fund) has produced 0.2% net of fees.. “Successfully” zigging to the zagging?
From one hedge fund website: “…hedge funds continue to offer investors a solid alternative to traditional investment funds—an alternative that brings the possibility of higher returns that are uncorrelated to the stock and bond markets.” Indeed.
Want an expert opinion on your investments? We would be happy to meet with you! Contact us for a consultation.
