In this article, we will give you the unbiased insight you need, providing summaries of the most common strategies amongst hedge funds. This will open your eyes to the different methods used to generate profit in the hedge fund world, and will create a fundamental understanding that will be easy to build upon.

Below, we have listed a few of the most popular strategies associated with today’s hedge fund market.  These range from conservative to aggressive, and are mostly implemented in the equities, futures and forex markets. Scroll down and take a look!

Hedge Fund Investment Strategies

Aggressive Growth Hedge Funds:   If a hedge fund trades in equities aggressively, they will usually invest in small or micro cap stocks which are expected to experience rapid growth over a short period of time. This includes stocks in sectors such as technology, banking, pharmaceuticals, and biotechnology. For example, a hedge fund manager may short an equity index when earnings reports are expected to be very poor.  If an aggressive hedge fund is trading in forex or futures, they will use high leverage lots and “swing trade”, setting their profit goals before even entering into the trade.

Short Selling Hedge Funds:  Equity-based hedge funds which “short the market” sell securities in anticipation of being able to re-buy them in the future at a lower price.  This can be selling a financial index, large cap stock, or any other tradable equity.  Generally, short sale hedge funds will focus on capitalizing in “overbought” markets which are expected to decline.  If a short sale hedge fund is trading in futures or forex, they will use the same analysis strategies, but will implement their short positions with varying leverage.

Multi-Strategy Hedge Funds: With this type of hedge fund, the investment approach is diversified by employing various strategies simultaneously to realize short and long-term gains. For example, a hedge fund manager may use a short sale strategy to take advantage of a short-term falling market, and then buy call options to protect and profit from a rising market in the long-term. This style of investing allows the manager to enjoy the benefits of different strategies, and capitalize on far more opportunities in the markets.

Event Driven Hedge Funds: The hedge funds that are considered “event driven” focus on profiting in markets with important news releases or other events. In the equity markets, this can be IPO’s, sudden price changes caused by earnings disappointments, hostile bids, and other global events that affect the markets. If the hedge fund is trading in the forex or futures markets, and is prepared for big events, they can use high leverage and earn a month’s profits in just a few hours.

Option Trading Hedge Funds:  The few hedge fund managers that trade options work in the equity or futures markets.  By purchasing or selling options, hedge funds can define their risk and reward easier, and produce more stable yields than those with naked positions.  For example, a futures trader would implement a “butterfly call spread”, by purchasing 5 Crude “72” options, selling 10 “74’s”, and buying 5 more “76’s”. Though option trading hasn’t been as popular as other hedge fund strategies, it is now becoming utilized by more hedge fund managers than ever.

Hedge Fund of Funds:  In recent years, the term “fund of funds” has become very common amongst those in the investment world. By definition, this is a hedge fund which allocates the money of their investors to several other funds with different strategies.  By nature, this blending of different strategies and asset classes aims to provide a more stable long-term yield than any individual fund would. This is used by hedge funds that trade in the equities, futures, and forex markets.

As you can see, though you may have two different entities that are considered to be “hedge funds”, they can be as different as night and day.  You can have one fund manager who trades options on futures, and another that shorts securities to profit.  Despite the focus of this article, you should always understand, it isn’t the strategy that defines your success, it is the experience of the hedge fund manager.

In summary, a “hedge fund” is nothing more than a legal corporate structure, and though each fund may desire profit, their means to attaining it is almost always unique.  Remember, false assumptions only hurt the one who assumes, and if you’re smart, you will treat each hedge fund as its own beast.  By doing so, you will have a clearer head when making decisions, and a far better chance of succeeding in the hedge fund world.

InsideTrade LLC Staff
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Though almost everyone has heard of the term “hedge fund”, unfortunately, most people don’t REALLY know what it means?  To help spread the truth and clear up any misconceptions, we decided to explain this topic in detail.

A hedge fund is a private investment fund that invests in various assets such as securities, commodities, currencies, and derivatives, all on behalf of its investors. Hedge funds are usually open to a limited range of investors, and some funds can have Billions under management. Typically, the investor pays a performance fee to the hedge fund manager, which is typically their main source of compensation.  For more information on fees, click on Fees for Hedge Fund Investments.

Despite the common misconception, hedge funds are NOT all the same. Each hedge fund has its own investment strategy, and in fact, some funds can be as different as night and day.  For example, there are some hedge funds that ONLY short-sell equity markets after news releases.  On the other hand, there are some hedge funds that ONLY invest in commodities or eco-friendly stocks.  As you can see, hedge funds can be different in every area except one, their goal to profit.

As you may know, hedge funds typically produce higher yields than traditional investments. This is because most hedge funds are private, which allows them to invest in almost any market condition.  For example, hedge funds can legally short-sell when the market is going down, and many mutual funds can not.  This allows hedge fund managers to profit in markets that are growing AND declining, greatly increasing their potential yields.

Though profit is everyone’s goal, negative media attention has lead many to question the economic impact of hedge funds. The real truth is, hedge funds are a tool of the ultra-wealthy, and they play an important role in the world economy.  Without hedge funds, many businesses would NEVER be funded and our investment markets would be far more illiquid. Unfortunately, since hedge funds can produce far higher yields than the rest of the market, they will continue to be a scapegoat for years to come.

Now that you understand the characteristics of a hedge fund, it may be time to dig a little deeper. To do so, scroll down and take a look at the list of Related Articles. Also, if you would like to watch a good video, click on “Billionaire Hedge Fund Managers”.  It is an EYE-OPENING presentation which demonstrates the most profitable investment structure in the world, the hedge fund.

InsideTrade LLC Staff
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Since the mass media has painted a picture that is far from true, and many have jumped on the bandwagon, we felt it was important to outline the facts of hedge fund investing.  In this article, we will give you opportunity to learn the truths, and dispel the myths that have spread amongst the general public.  First things first, let’s take a look at some of the top stigmas associated with hedge fund investments.

Top Hedge Fund Investment Myths

1.  “Madoff Scams” are Common:  The fact is, in today’s world, scams are becoming more frequent in every sector of the investment world. Though there have been two major hedge fund scams over the past few years, there were thousands of other hedge funds that performed ethical business, and had high yields.   We understand that it is hard to ignore something as big as the Maddoff scam, but it is self-restricting to prejudge an entire market based upon the idiocy of one person.

2.  Hedge Funds are Bad for the World:  Though this is the perception that the media has beaten into you, it is anything but true.   If hedge funds are making more money for investors than any other major investment medium, how could they be bad for the world economy?  The fact is, the wealth that is developed in these funds will be spent in economies all over the world, providing a sort of “stimulus” that can’t even be mimicked by the government.

3.  Hedge Funds are Very Risky:  Generally, hedge fund managers use rather low risk strategies, and invest in many of the same things that the typical investor does.  As a hedge fund manager, your focus is to protect your investors from risk first, and attain profit second.   Any investment professional will tell you, stability is what attracts LARGE investors, not monumental yields.  In short, don’t be scared just because you heard a few bad stories, if anything, the hedge fund market should be considered the safest of all alternative investments.

4.  Hedge Funds are All Dying Off:  In the past two years, there have been a number of hedge funds which have gone out of business.  Despite this fact, there is one thing that most people don’t account for, the number of new hedge funds which were created in that time.  In all reality, with the new popularity of offshore hedge funds, there may be more funds that were created than closed. Once again, since some of the major hedge funds have closed recently, it has created a perception in the media that is far from true.

5.  Hedge Fund Investors Must be Rich:   Though most hedge fund managers only offer investment opportunities to those with 1M or more, there are a number of funds which require far less.  Recently, since hedge funds have become so popular, there have been a number of new funds which offer investments as low as 100K.  Even though these funds may require less to start investing, with the collection of a large number of investors, they can all trade as one to earn higher yields than they would alone.

Though it is important to recognize the truth about hedge funds, it is far more important to remember this: the investment world is full of two types of people, those who know what they are talking about, and those who think they do. Typically those who THINK they do are watching television and agreeing with the general consensus of the public.  On the other hand, those who are educated through first-hand experience and/or mentoring understand the facts of the business, and profit from their information and relationships.

As with every other alternative investment market, you will never understand the intricacies of the hedge fund business until you have taken part in it as a broker or investor.  Despite the myths you hear, the general fact is, hedge funds outperform the equity markets every single year, no matter what the market is doing!  With steady growth over the last decade, and Trillions of dollars invested in hedge funds already, this “infamous” market may never stop expanding…

InsideTrade LLC Staff
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Over the course of our search, we found a great video sponsored by the New York Times that gave some interesting facts on the incomes of hedge fund managers.  We all knew that hedge fund managers were rich, but after you hear some of the facts in this video, you will be astounded!

For your benefit, we have listed some of the main points of the video below. This will allow you to get understand the concept quickly, so you can move on to our other great articles.

Hedge Fund Video Key Points

1. Top 25 Hedge Fund Managers Made $892 Million on Average in 2007
2. Top 5 Hedge Managers Made more than Value of Bear Stearns
3. Over Last 5 Years Hedge Fund Manager Income has Grown 1000%
4. Why Can Hedge Fund Managers Make so Much Money?
5. Hedge Funds are Growing Much Faster Recently in Modern Markets
6. There are More Wealthy Investors Around to Invest in Hedge Funds
7. Hedge Fund Management is a Scalable Skill that Can Adapt to Almost Any Investment Amount

Though some of these facts about hedge fund managers are quite unbelievable, as you will see, the video below confirms this recently popular topic.

Thank you for visiting our website, and we hope you enjoy this video!

InsideTrade LLC Staff
(412) 235-2855

In this brief article, we will outline the typical fee structure for a hedge fund, while discussing the common and less frequent fees associated with hedge fund investing. In addition, we will detail the importance of understanding these fees before moving forward with any hedge fund.

First things first, let’s start off with the two most common hedge fund fees, the “incentive fee” and the “management fee”.

An “Incentive Fee” is the percentage of the profit that is due to the hedge fund manager for their account management and trading services.  Typically, this fee is 20% of the yields that are earned in the account, but it can be as high as 30% for certain hedge funds.

“Management Fees” are the annual fees which hedge fund managers charge to maintain the accounts of the investor. Typically, this fee is 2-3% of the account value, and is either deducted at the end of the year, or broken up monthly.

Though incentive and management fees are the most common amongst hedge funds, some funds may have other fees which apply as well.  To make it simple for our readers, we have listed a few of these “less frequent fees” in the section below.  Scroll down, and take a look!

Infrequent Hedge Fund Fees

1. Round Turn Fees: If you are investing in a futures or forex hedge fund, you may have a “round turn” fee for all of the trades placed on your behalf.  This can be $20-40 per trade, which is very little to attain the high yields that are possible in these markets.

2. Front End Fees: Some hedge funds even have “load fees” (1-6% of investment), which are upfront costs due before the investor enters into the fund.  This is used by hedge fund managers who feel they can justify it because of their strong historical yields.  Though it may seem crazy, many investors are happy to pay 6% or more upfront to work with the right hedge fund manager.

3. Back End Fees:  Many hedge funds will have fees which must be paid to close the account, and access the full balance.  Though this is rare, if it does have to be paid, it is usually a very small amount (1-2% of account value).

4. Early Withdrawal Penalties:   Most hedge funds have rules for how long the investor must keep their capital in the fund before withdrawing it.  If the investor chooses to break these rules, there can be some steep penalties for doing so.   In fact, penalties for most hedge funds can be as high as 20-40%+ of the amount you withdraw.  The reason is, withdrawals hurt the yields of the hedge fund, and the historical yields are their key tool to attract new investors.

5. Additional Performance Fees:  Some hedge fund managers will add clauses or goal-based incentives into the contract with the investor.  This will give the hedge fund manager the opportunity to earn even higher fees if they meet certain net yield requirements.  Either way, it is a win-win for both the investor and fund manager, since they each earn more profit in the long run.

Though there are a number of fees for hedge funds, the great thing is, there is NO POINT to be scared of them.  If you do come across a hedge fund with high fees, always remember, hedge funds with higher fees usually return higher yields as well.   If they can justify the fee hike, then it may even be worth going out of your way to invest with them. As a general rule of thumb, hedge funds managers typically charge both the incentive and management fee for new investors, and rarely have others that apply.

All in all, hedge fund fees are important to understand, but they should NOT be a critical factor when you are looking to invest. The fact is, REAL hedge funds quote their profits after all fees have been deducted, NOT before.  In all reality, it doesn’t matter how much you are paying in fees, as long as the net yield meets the needs of your portfolio.

InsideTrade LLC Staff
(412) 235-2855

In today’s market of uncertainty, alternative investments have been gaining important ground traditional investing.  At one point, alternative investment managers were in low demand, but things have dramatically changed since then.  Now, markets like forex, futures, private equity and others are taking over, leaving stocks in the dust.  With little hope for stocks in the future, it seems as if every alternative investment company has immense opportunities for growth.  With Trillions traded per day in the alternative investment markets, you may ask, “How much bigger could they grow”? Well, with rapidly growing interest, time will only tell.

If you choose the right alternative investment fund to work with, you could become wealthy from that single decision.  Whether it is an opportunity that focuses on forex, futures, or other alternative investments, the yields can be very high with the right manager! For more education on alternative investments, take a minute and navigate through our blog.  Also, if you are interested in brokering alternative investments, take a look at our “Broker Education Category”.  It covers everything you need to know to brokering alternative investments, whether its futures, forex, or other markets you are interested in.

In today’s hedge fund market, unfortunately, the opportunities are far and few between.  Though many hedge fund strategies HAVE failed in the equity markets, other types of hedge funds have prospered during that same time.  Despite the stigma the media presents, the hedge fund market is growing steadily and still providing high yields.  In fact, forex and futures hedge funds have recently become the hottest trend, allowing investors to aim for high yields with no correlation to the equities markets. As a hedge fund investor, wouldn’t you want to the chance to earn double digit yields every month? The answer is obvious, hence the new growing trend in the hedge fund markets.

To summarize, hedge funds are a great investment vehicle for building wealth, whether you’re a broker or investor.  Always remember, hedge funds are a just corporate structure which can apply to any market, and no two hedge funds are the same.  The truth is, some hedge funds did very well in the recent crisis, and others became insolvent. Do yourself a favor and ignore the stigmas of the hedge fund market, it could earn you Millions in the end.

If you are interested in more information about hedge fund investing, take a look at our “Hedge Fund Category”.  It contains hedge fund videos, articles, education, and plenty more for you to chew on.  Whether you are an investor or broker, the reality is, the hedge fund market will only get bigger. The only question is, do you want to earn money during that time, or not?

This is a good report on hedge funds for beginners, but like most other media, it gives a negative perspective on hedge fund strategies and risk. For your information, this was shot during the middle of the economic crisis, a time where everyone wanted to point fingers and blame those still making money.  As we all know “heavy lies the crown”, and as you can see, it is no different for hedge funds.

Before we get to the video, let’s outline some key points to remember.  Scroll down, and take a look!

Key Points of Hedge Fund Investment Video

1. Amaranth Hedge Fund Lost Most of its Money on Bad Natural Gas Trades Expecting Hurricanes to Raise Prices
2. “Almost Anyone” Can Start a Hedge Fund Since Many Investors are Looking for High Yields and Hedge Funds Can Deliver the
3. Reality of a Hedge Fund Today is that it is an Unregulated Investment Fund, Not Strictly a “Hedge” Strategy Like it Sounds
4. Hedge Funds do Not Have Constraints but they Only Can Accept Money from Accredited Investors with 5M+ who are “Smart Enough” to Take Risk
5. News Reporter would have Billions Under Management, if You have the Right Background, Economic Advisors, and Plan for the Hedge Fund you Could too
6. Hedge Fund’s Goal is to Provide Steady High Yields, “Don’t Rock the Boat” for their Investors
7. Generally, Hedge Funds Invest in Several Different Markets so they are Not Overexposed in Any of Them
8. Bad Hedge Fund Managers don’t Understand the “Black Swan Theory”, Just Because it Hasn’t Happened in the Market Doesn’t Mean it Won’t
9. All You Need is One Bad Month to Erase Years of High Yields if You are Overconfident, and Underestimating the Likely-hood of Rare Events (“Black Swan Theory”)
10. Even though it is Easy to Start a Hedge Fund, it isn’t a Good Idea for Everyone, Have to be a Professional and Expert in the Investment Markets

In this video they will focus primarily of the risks of hedge funds and hedge fund management, but trust me, there a TONS of successful hedge fund managers out there! To see how successful you can be as a hedge fund manager, and prove our point, click on the video “Billionaire Hedge Fund Managers”.

Scroll down, and press play. We hope you enjoy the video!

InsideTrade LLC Staff
(412) 235-2855

With today’s market turmoil, alternative investments have been gaining important ground on other markets.  At one time, stock brokers were the trend of the investment world, but now, it is the alternative investment advisor.  With more investors seeking alternative investments than ever, there is a growing demand for brokers who can assist these clients. Those who are smart will take advantage of this trend in alternative investments, and those who don’t, will only have regrets in the future.

In summary, if you find the right alternative investment company, you could become very wealthy from investing or brokering.  The reality is, alternative investments offer far higher yields for investors, and much stronger commissions for brokers. In fact, when you look at the benefits of alternative investments versus equities, it’s like day and night.

If you’d like to learn more about the alternative investment markets, take a minute and navigate through our unique blog.  Also, if you are interested in working with a good alternative investment manager, take a look at our Broker Education Section.  It will give you all the tools you need for alternative investment brokerage, and far more to help you shorten your path to success.

In today’s hedge fund market, unfortunately, the opportunities are scattered very thin.  Though many hedge fund strategies have failed recently in the equity markets, other types of hedge funds have prospered.  Despite the stigma our public media portrays, the hedge fund market is growing steadily and still providing above average yields.  In fact, forex and futures hedge funds have become the hot trend, giving investors high yields with no correlation to the equities markets.  With this new trend gaining more steam, it seems as if the hedge fund world could never stop growing…

In summary, hedge funds are a great method of building wealth, both as an investor and broker. Remember, hedge funds are a just corporate structure which can apply to any market, and they are never the same.  The fact is, some hedge funds have done well recently and some funds have gone insolvent. The difference is always the strategy, and its application to the market niche they are focusing on. If you are interested in more information about hedge fund investing, take a look at the articles in our “Hedge Fund Category”. It contains hedge fund videos,analysis, education and a whole lot more.

In today’s wild market, alternative investments have been gaining important ground on traditional investments.   Though some frown on the idea of an alternative investment strategy, the truth is, alternative markets have produced far higher yields.  Why invest your money in equities when forex and futures have made better yields with lower risk?  That is a question that is making investors flock to alternative investments, looking for ways to recover from the damage other markets have caused.

If you choose the right alternative investment advisor to work with, you could become very wealthy from that single decision.  On the other hand, if you find an alternative investment that isn’t what it seems, you could be in for a lot of trouble.  Remember, always complete due diligence on every alternative investment company, or you could put yourself at risk. For more education on alternative investments, take a minute and navigate through our blog.  Also, if you are interested in brokering alternative investments, take a look through our broker education category.  It covers everything you need to know about brokering high yield alternative investments, and far more.

With recent uncertainty, alternative investments have been gaining important ground traditional investing.  Unfortunately, many misinformed investors still believe there is a large risk present in any alternative investment strategy.  Then again, these are the same investors who lost over 40% the last 2 years in the equity markets, when most alternative investments earned great yields during that time.  Obviously, it isn’t about the market you are investing in, it is the degree of expertise you have within it. The fact is, many alternative investment managers double their money every year, and if you invested in stocks, that could take 10 years.

If you choose the right alternative investment fund, you could easily be retired for life. The truth is, there is plenty of up and coming talent in the alternative investments markets, and if you invested with the right manager, you could ride their coat tail to riches. For example, if you found a great managed forex trader, you could be doubling your money every year or better.  Though good alternative investments are tough to find at times, if you research your niche, your chances of success will dramatically increase. For more education on alternative investments, take a minute to look through our blog.  Also, if you are interested in becoming an alternative investment advisor, take a look at the “broker education category”. By educating yourself through our alternative investment blog, you will learn everything you need to know about alternative investments, whether you want to make money investing or brokering.

With today’s market volatility, good hedge fund investments can be very hard to find. Though many hedge fund managers have focused on equity markets, in recent years, other types of hedge funds have come onto the scene.  Whether it’s forex, futures, or options, the new wave of hedge funds is here, and it’s only getting bigger. Let’s face it, fixed equities are a thing of the past, and with alternative investments doing so well, it is hard to invest anywhere else.

As you can see, hedge funds are a great method of building wealth whether you’re investing or brokering. The point to remember is, hedge funds are nothing more than a corporate investment structure, and no two funds are identical.  Just like any other market, some hedge funds did very well in recent years, and others simply flopped. The difference always lies within the strategy, market, and discretion of the hedge fund manager.  In short, the term hedge fund doesn’t represent a market, it represents a corporate structure. Don’t get caught up in all of the hedge fund media hype, or you’ll be like most of the public, blinded by ignorance.

If you would like to read more information about hedge fund investing, take a look at the articles in our ” Hedge Fund Category”.  This will give you the tools you need to tackle the hedge fund industry head on, whether you are an investor or a broker.

In today’s volatile market, alternative investments have been gaining a lot of ground on traditional investing.  In fact, the alternative investment company is now well-known throughout the investment markets, unlike years ago. Whether this company focuses on alternative investments like forex, futures, or private equity, they are always aiming for yields that exceed the traditional markets. The great part is, even if you implement a low risk alternative investment strategy, you can still earn higher yields than stock markets.

If you choose the right alternative investment fund to invest with, you could become wealthy for the rest of your life.  Though this is true, there are also risks to alternative investments. The point to remember is, education is the single determinant to your success or failure in alternative investments. For more education on alternative investment topics, take a minute and navigate through the different sections of our blog.  Also, if you are interested in possibly becoming an alternative investment advisor, take a look at our unique broker education category.  It covers marketing, tips, steps, preparation and far more for the aspiring alternative investment broker.