Hedge funds resemble mutual funds in some ways, but have way more flexibility when it comes to investment strategies. Hedge fund managers can use leverage, bet on price declines (short-selling), and pursue various speculative bets around the globe. Hedge funds are mostly reserved for the rich as minimum investment requirements are often large (such as $100,000). What's more, there are lock-up periods during which money can't be withdrawn.
In this section, we go into more details about these alternative investment funds. First, we provide an overview, then we present various hedge fund strategies. This is followed with a discussion about fees that investors are charged, and other topics such as a warning about some of the hedge fund managers.
While most investors will never buy into hedge funds due to high minimum investment requirements, these are topics that should be studied by those interested in expanding their investment knowledge.
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Hedge funds aren't for eveyone. It's a rich man's game.
Hedge funds are investment funds with lots of flexibility, but require more capital to enter than mutual funds or ETFs. These funds cater to wealthy investors.