Hedge Funds - Establishing a New Frontier
It is difficult to provide a general definition of a hedge fund. Initially, hedge funds would sell short the stock market, thus providing a “hedge” against any stock market declines. Today the term is applied more broadly to any type of private investment partnership. There are thousands of different hedge funds globally. Their primary objective is to make lots of money, and to make money by investing in all sorts of different investments and investments strategies. Most of these strategies are more aggressive than than the investments made by mutual funds.
A hedge fund is thus a private investment fund, which invests in a variety of different investments. The general partner chooses the different investments and also handles all of the trading activity and day-to-day operations of the fund. The investor or the limited partners invest most of the money and participate in the gains of the fund. The general manager usually charges a small management fee and a large incentive bonus if they earn a high rate of return.
While this may sound a lot like a mutual fund, there are major differences between mutual fund and hedge fund:
1. Mutual funds are operated by mutual fund or investment companies and are heavily regulated. Hedge funds, as private funds, have far fewer restrictions and regulations.
2. Mutual fund companies invest their client’s money, while hedge funds invest their client’s money and their own money in the underlying investments.
3. Hedge funds charge a performance bonus: usually 20 percent of all the gains above a certain hurdle rate, which is in line with equity market returns. Some hedge funds have been able to generate annual rates of return of 50 percent or more, even during difficult market environments.
4. Mutual funds have disclosure and other requirements that prohibit a fund from investing in derivative products, using leverage, short selling, taking too large a position in one investment, or investing in commodities. Hedge funds are free to invest however they wish.
5. Hedge funds are not permitted to solicit investments, which is likely why you hear very little about these funds. During the previous five years some of these funds have doubled, tripled, quadrupled in value or more. However, hedge funds do incur large risks and just as many funds have disappeared after losing big.
About the author: Tony Reed is the author of “Hedge funds - establishing a new frontier“, please visit his website Hedge funds for more information.Social Class: A Limitation You Must Rise Above
Over the years, man has lived together in societies. By society, mean a group of people with shared values, beliefs, symbols and patterns of behavior. Although many things are shared in common within the society, there are others that are not. These include goods and services, rights and obligation, power and prestige. This constitutes social inequality. Hence, the society has been stratified into classes. In the ancient Rome, the society was classified into the Patrician, the Knights, the Plebeians and the Slaves. The middle Age had the Feudal lords, the Vassals, the Guild masters, the Journeymen, the Apprentices and the Serfs. In modern time, the society has been classified into the Bourgeoisies, the Proletariats, the Peasants and the Wealthy class. It is a common saying that “The rich gets richer while the poor gets poorer”. This is because the society has devised a system to keep the various classes stable. Therefore, there are different conditions that prevent a person in one class from migrating to another class. These conditions include Family background, level of acquired skills, availability of finance etc. Although an individual cannot determine the social class he would be born into, he can choose where he would belong. For an individual to change his social class is not something that happens suddenly in a day nor is it something that comes by mere wishing. It happens over time with constant effort and un-deviated focus, here are some stops that would help you rise above the limitations of your present social class.
8 Steps to rise above the limitations of your present social class
(1) Have a clear dream of the class you want to belong.
(2) Set goals that would take you to your dream.
(3) Make deadlines to reach your goals and stay committed to them.
(4) Acquire the skills that would take you to your dream class.
(5) Use your skill to solve people’s problems.
(6) Improve on your skills and services every day.
(7) Build up a capital base by saving part of your income.
(8) Expand your influence with your savings.
Uche Onutochukwu M is an online business coach that helps people to succeed in their businesses. For more information on wealth building strategies visit http://www.2betterlife.com