Wednesday, July 26, 2006

Hedge Funds

Almost everybody had heard of hedge funds. Yet not many know what its about except that its replacing "mutual funds" as the "in" thing in investment world. Part of the hedge fund myth is fueled largely by the edification of hedge fund managers as investment genuises. Multihundred million dollars average annual paycheck of the top 25 managers (with the top two breaking the billion dollar mark last year) makes them the rock stars of Wall Street. Here are some blogs about the hedge fund world.

A hedge fund is...

Alfred Winslow Jones coined the term in 1946. Basically, a hedge fund is a limited partnership company with a fund manager. The partnership allows a maximum of 499 investors with each a minimum annual income of $200,000 and a net worth of at least $1,000,000.

Hedge funds are the new status symbols.

The hedge funds strategy of investing involves going long on a favored stock and shorting an unfavored one, to gain on both price movements.

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