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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Life-long learner. Passionate about leadership, entrepreneurship, philosophy, Buddhism & SF. Founder @deepstash.
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Why invest in index funds?
- Minimize your time spent researching individual stocks.
- You can invest with less risk.
- Index funds are available for a wide variety of investments. You can buy stock index funds and bond index funds.
- It's a lot
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