Hedge Funds


... are investment vehicles which aims to hedge (aka minimize or eliminate) market risk. Some differences from traditional funds:

  • they are available to people with more than $1-5M
  • they are available to "accredited" investors, so they are less regulated
  • less regulation means they can invest in anything from stocks to Pokemon cards
  • they can also borrow a lot of money & bet against prices (shorting) 
  • they are quite expensive, charging a profit over a certain return threshold (hurdle rate)

Hedge funds have a bad rap for their unorthodox methods, but help keep prices in check for whole markets. 

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