Quote:
Originally Posted by joshuanip
A few misconceptions, what is a hedge fund? It’s a fund that hedges....
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Absolutely not true! Yes, that's what the word "hedge" means but as a rule hedge funds aren't hedged. They just don't have to abide by the rules regarding such things as diversification under which standard mutual funds operate. Often times hedge funds are very risky indeed because they can make big unconventional bets.
That's why as a stockbroker I NEVER suggested a hedge fund to a client. If the thing dropped, I didn't want to have to respond to the question of why the fund wasn't hedged (against losses) as they thought I implied. No way!
