Hedge Fund

Hedge Funds are private investmentns offered by Limited Partnerships or Open Mutual Fund Trusts. Hedge Funds gather investors money, using high risk and offer potentially high returns. Common risky Hedge Fund strategies are, using leverage, investing in derivatives and short selling. Some Hedge Funds diversify their investments, reducing risk. Many of the investment strategies are advances and difficult to understand.

Hedge Funds are often exclusive to wealthy individuals. The funds often require large initial investments ie: $200,000. A lot of money can be earned or lost. Returns are earned when the Fund has been sold, for hopefully more than you paid. No interest is made on these funds. Hedge Funds are quite illiquid when compared to Mutual Funds or stocks. The selling process can take months. Fees are common with Hedge Funds. An investor will typically pay a sales commission after purchase. Management fees are common as well. Take caution when investing in Hedge Funds.

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