The Limping Bull 4.1

Euh ... I have to apologize for the typos and grammar errors I let through in my previous posts. I hadn't exactly proof-read everything.

Now's test time. Who in the banking and financial services industry get richest quickest?

• Investment Bankers
• Hedge Fund Managers
• Financial Analysis Managers
• Bank Branch Manager

Well, it seems the Hedge Fund Managers get wealthier faster than other banking & financial services professionals. Hardly a surprise when you consider what a hedge fund is:
A fund usually used by wealthy investors or institutions (because of legal restrictions) which uses aggressive, techniques including selling short, leverage, program trading, swaps, arbitrage and derivatives to offset or reduce the risk associated with an existing investment or group of investments. The keyword here is "aggressive".

Now don't get fooled by the name! Some of these funds do not actually hedge against risk (Hedging being the attempt to reduce risk). In fact, there are different styles of hedge funds who pursue different investment strategies in terms of returns volatility and risk. These funds are called "Hedge Funds" maybe because they are often used by investors as a means to diversify away some risk in a particular portfolio. Or the name prevailed because despite controversy surrounding the $US1 trillion industry , most of these funds do seek to reduce risk.

"Yeah. So what's the problem then?" you will ask. This sounds very much like a mutual fund with a little more liberty to meet investors demands. Well, not exactly.

Continues ...

Posted by Editor on Thursday, December 09, 2004 at 4:12 PM | Permalink