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Hedge Funds
Research all you need to know about Hedge Funds so you can make an informed decision.
Hedge Fund investing is not as constrained as mutual funds are. Hedge Funds often employ long/short equity strategies in addition to alternative strategies such as selling short, arbitrage, trading options or derivatives, using leverage such as borrowing on margin, investing in seemingly undervalued securities, trading commodity and foreign exchange (FX) contracts, and attempting to take advantage of the spread between current market price and the ultimate purchase price in situations such as mergers. Hedge Funds are a potentially lucrative investment for wealthy individuals.
Hedge funds pool investors' money and invest those funds in financial instruments in an effort to make a positive return. Many hedge funds seek to profit in all kinds of markets by pursuing leveraging and other speculative investment practices that may increase the risk of investment loss. Hedge funds are not required to register with the SEC because hedge funds typically issue securities in private offerings that are not registered with the SEC under the Securities Act of 1933. Also, hedge funds are not required to make periodic reports under the Securities Exchange Act of 1934.