There are many different types of investment funds designed to increase personal wealth. One of the fastest growing type of investment funds is called a hedge fund. The first hedge fund was created by Alfred W. Jones in 1949. Today, it is estimated that almost $2 trillion is currently invested in hedge funds throughout the world. Unlike many other investments, a hedge fund is designed to increase the investment in any financial conditions. Continue reading to find out more about hedge funds.
What is a hedge fund?
A hedge fund is similar to most other investment funds because money is invested with the goal of increasing this investment. A hedge fund differs simply because of the type of investment strategy. Generally speaking a hedge fund is designed to make money regardless of the current economic situation and protect the investors from market downturns. However, the actual investment strategies can vary considerably between each hedge fund. It is not uncommon for people who invest in a more traditional investment fund to also have some money in a hedge fund as a kind of insurance against a market collapse.
Other types of hedge funds take on more risk and are designed to outperform other types of investments. These are managed much more aggressively than a traditional hedge fund and may include speculative investments. This type of hedge fund has become more common over the last decade and carries far greater risks to the investor. As with any financial decision, it is important to seek qualified financial advice before making any investment.