In This Chapter
Understanding what hedge funds are
Exploring the strategies that are available
Checking out a fund of hedge funds
Discovering some new ideas based on hedge funds
Looking at some do’s and don’ts when investing in hedge funds
The reputation of hedge funds is appalling. I can’t put it a nicer way. It’s bad, terrible, dreadful. People blame hedge funds for almost everything, from the collapse of banks to the collapse of currencies to the collapse of jobs. And I’ve probably left out a few collapses. Additionally, many are unregulated and offshore, or if they’re subject to a rulebook, it’s a very slim one.
But although many make huge sums for their managers and investors, many also fail. You hear a lot less about the duds than the stellar performers. Hedge funds are very risky and about as far as you can get from a one-way bet to riches. Thousands fail every year, mostly in total obscurity, even secrecy. The majority make nothing for their ...