WTF is a "hedge fund"?

[Postman]

eom

[zabet]

1. Money saved

to buy boxwoods and privets.
:P

[HCE SuiGeneris]

2. Go here...

http://en.wikipedia.org/wiki/Hedge_fund

[Catherine Vincent]

8. Gee, that's the longest definition I've seen.

I know Chelsea Clinton works for a Hedge Fund group.

[Postman]

10. But only the wealthy can get a near 50% return on their money...

1. RAB Special Situations Fund (RAB Capital, London) - 47.69%

[Karenina]

3. Google is your friend.

[liberalmuse]

4. I'm not sure...

but it kinda looks like this:

[Botany]

5. It pays for pruning, fert, and mulch

[Bluebear]

7. get out of my head

[Wiley50]

6. In my hood, it's when two elderly neighbors with bushes along their mutual property line

pool their money to hire a local kid to come trim them.

But I think it means something entirely different on the rich side of town

[DontTreadOnMe]

9. Go Dodd!

Do Hedge Funds grow in the Cayman Islands?

[Suich]

11. Let me know if you get an answer.

I don't understand the Google or the Wikipedia definitions. I need it in language a 5th grader can understand!



:)

[Postman]

14. Unregulated investments made for wealthy entities...

to bypass taxes...

The way I read it, its a tax dodge.

[Fabio]

17. r u kidding?

[Fed_Up_Grammy]

12. Money collected for the production of "Over the Hedge"

[Lydia Leftcoast]

13. Hmm, reading the Wikipedia definition...

A hedge fund is an investment fund structured to avoid direct regulation and taxation in major countries and which charges a performance fee based on the increase of the value of the fund's assets. The assets of a hedge fund will usually be managed by an investment management firm. As a hedge fund is largely unregulated, its investment manager is able to deploy a wider range of investment strategies and tactics than it could for a regulated fund, and investing in a hedge fund is therefore considered to carry more risk...

I get the impression that a hedge fund is allowed to be invested in ways that would be illegal in most cases?

[Selatius]

15. A way to dodge the law. n/t

[Old_Growth]

16. Hedge Fund...

A non profit organization for disenfranchised hedgehogs?

[Deja Q]

18. Next to the "picket fence spears"?

:hide:

[Mike03]

19. It's rather complicated but the main points are:

1. They are generally only opened to wealthy people, because the losses can be substantial. (EDIT: There is a minimum amount for an investment and these sums can range from hundreds of thousands to millions. Sometimes the funds want to know your net worth so they can filter out dangerous investors.)

2. They are not regulated. They are also not very transparent. It is rare to receive a monthly or quarterly in-depth update about why a strategy succeeds or fails, or what the portfolio looks like.

3. They tend to be extremely highly leveraged, which magnifies not only the gains but the losses.

4. A hedge fund caught in a lockup, unable to get rid of an equity or currency, can get killed in a matter of hours if they miscalculate their holdings.

[Little Star]

20. Sounds like gambling to me?????