Hedge funds are losing your money

Hedge funds simply explained

Among the best-known strategies of Hedge funds belong:

This is the most widely used strategy. The fund manager buys and sells shares of various companies and speculates on their future price development. So the basic speculation is that some stocks will perform better and others will lose value. The fund concentrates either more on one or the other position. Many hedge funds focus on that Short position and thus on the Short sales.

  • Arbitrage-strategy / Relative-Value-strategy

Be in this strategy Price and exchange rate differences from Securities in different markets exploited. In such an arbitrage business, the fund buys individual securities on one stock exchange in order to take advantage of price differences on other stock exchanges and then sell them again there.

This is an event-based oneHedge fundsstrategy. So you have one or more markets in view andtakes advantage of certain events and developments. So z. B. mergers, takeovers or bankruptcies of companies are included in the investment strategy. Likewise, there can be speculationTurnarounds (e.g. through rescues)of to be refurbished Companies with a low share price and great recovery potential be. If the company is restructured and the share price rises, the hedge fund makes a profit. Conversely, the fund can also make losses if the desired event does not occur.

The global macro strategy involves making money through trends. So the core is that you canMarkets macroeconomic (i.e. as a whole, instead of just focussing on a part)observed and itIdentifies opportunities in order to then systematically exploit them in order to generate potentially high profits. The fund manager tries out political, social and economic developments as well as interestsPredict trends and invest early accordingly.