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Hedge Funds For Dummies



Hedge Funds For Dummies

Ann C. Logue

ISBN: 978-1-118-05092-7 March 2011 360 Pages

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If you want to diversify your portfolio and lower your risk exposure with hedge funds, here’s what you should know: Hedge Funds For Dummies explains all the different types of funds, explores the pros and cons of funds as an investment, shows you how to find a good broker, and much more.

Authored by Ann Logue, a financial writer and hedge fund specialist, this handy, friendly guide covers all the bases for investors of all levels. Whether you’re just building your first portfolio or you’ve been investing for years, you’ll find everything you need to know inside:

  • What a hedge fund is and what it does
  • How hedge funds are structured
  • Determining whether a hedge fund is right for your portfolio
  • Calculating investment risk and return
  • Short- and long-term tax issues
  • Developing a hedge fund investment strategy
  • Monitoring and profiting on macroeconomic trends
  • Evaluating fund performance
  • Evaluating hedge fund management

If you’re investing for the future, you definitely want to minimize your risk and maximize your returns. A balanced portfolio with hedge funds is one of the best ways to achieve that sort of balance. This book walks you step by step through the process of evaluating and choosing funds, incorporating them into your portfolio in the right amounts, and making sure they give you the returns you expect and deserve. You’ll learn all the ins and outs of funds, including:

  • What kind of fees you should expect to pay
  • Picking a hedge fund advisor or broker
  • Fulfilling paperwork and purchasing requirements
  • Performing technical analysis and reading the data
  • How to withdraw funds and handle the taxes
  • Tracking fund performance yourself or through reporting services
  • Hedge fund strategies for smaller portfolios
  • Performing due diligence on funds that interest you

This friendly, to-the-point resource includes information you can’t do without, including sample portfolios that show you how to invest wisely. Hedge funds are an important part of every balanced portfolio, and this friendly guide tells how to use them to your best advantage. With important resources, vital information, and commonsense advice, Hedge Funds For Dummies is the perfect resource for every investor interested in hedge funds.

Introduction 1

Part I: What Is a Hedge Fund, Anyway? 7

Chapter 1: What People Talk About When They Talk About Hedge Funds 9

Chapter 2: Examining How Hedge Funds Are Structured 27

Chapter 3: Not Just a Sleeping Aid: Analyzing SEC Registration 47

Chapter 4: How to Buy into a Hedge Fund 59

Part II: Determining Whether Hedge Funds Are Right for You 71

Chapter 5: Hedging through Research and Asset Selection 73

Chapter 6: Calculating Investment Risk and Return 95

Chapter 7: You Want Your Money When? Balancing Time and Liquidity 123

Chapter 8: Taxes, Responsibilities, Transparency, and Other Investment Considerations 135

Chapter 9: Fitting Hedge Funds into a Portfolio 151

Part III: Setting Up Your Hedge Fund Investment Strategy 165

Chapter 10: Buying Low, Selling High: Using Arbitrage in Hedge Funds 167

Chapter 11: Short-Selling, Leveraging, and Other Equity Strategies 183

Chapter 12: Observing How Hedge Funds Profit from the Corporate Life Cycle 203

Chapter 13: Macro Funds: Looking for Global Trends 217

Chapter 14: But Will You Make Money? Evaluating Hedge-Fund Performance 233

Part IV: Special Considerations Regarding Hedge Funds 255

Chapter 15: Hooking Onto Other Types of Hedge Funds 257

Chapter 16: Using Hedge-Fund Strategies without Hedge Funds 271

Chapter 17: Hiring a Consultant to Help You with Hedge Funds 291

Chapter 18: Doing Due Diligence on a Hedge Fund 303

Part V: The Part of Tens 319

Chapter 19: Ten (Plus One) Big Myths about Hedge Funds 321

Chapter 20: Ten Good Reasons to Invest in a Hedge Fund 327

Index 333