Should I invest in a hedge fund?

0
0
Marked as spam
Posted by Del Dinkins (MONEY FORUMS: 7, Answers: 0)
Asked on May 12, 2016 9:33 pm
54 views
0
Private answer
Marked as spam
Posted by JoelWebb (MONEY FORUMS: 0, Answers: 2)
Answered: January 17, 2019 7:22 am
0
Private answer

Hi Del! Your question is a tough one to answer without knowing many specifics about your financial situation, goals, and risk tolerance. Investor.gov defines hedge funds as investment vehicles that “pool money from investors and invest in securities or other types of investments with the goal of getting positive returns. Hedge funds are not regulated as heavily as mutual funds and generally have more leeway than mutual funds to pursue investments and strategies that may increase the risk of investment losses. Hedge funds are limited to wealthier investors who can afford the higher fees and risks of hedge fund investing, and institutional investors, including pension funds.” A person needs to have a minimum level of income or assets (called an “accredited investor”) to invest in hedge funds. Hedge funds also tend to have higher fees such as an asset management fee of 1-2% of assets, plus a “performance fee” of 20% of the hedge fund’s profit. (From https://www.investor.gov/investing-basics/investment-products/hedge-funds) Hedge funds are considered to be very high risk and thus are not the kind of investment that is suitable for many investors.

Investment decisions are very personal and influenced by the investor’s goals and risk tolerance. It might be worth your time to do a risk tolerance survey to see where you stand on financial risk vs reward, which will give you a better idea of where to invest your money. You can access risk tolerance surveys at any of the following websites:

Rutgers University Investment Risk Tolerance Quiz
http://njaes.rutgers.edu/money/riskquiz/
Calcxml Site – What Is My Risk Tolerance?
https://www.calcxml.com/do/inv08
Vanguard Investor Questionnaire
https://personal.vanguard.com/us/FundsInvQuestionnaire
BYU Risk Tolerance Survey
http://personal-finance.byu.edu/content/learning-tools.

To learn more about investing in general and where to start, I recommend the following websites. These are safe and are not trying to sell you anything but rather just to educate you.

http://investor.gov/
http://www.pbs.org/your-life-your-money/tools_resources.php
http://www.smartaboutmoney.org/
http://investor.gov/introduction-markets
https://www.usa.gov/saving-investing

Hopefully this info helps! If not, please write back. Best wishes to you!

Marked as spam
Posted by Kathryn Hauer (MONEY FORUMS: 0, Answers: 18)
Answered: June 9, 2016 1:20 pm