| All investors are looking for the most time | | | | when a company that owns one is merging with |
| efficient ways to make the most money. For | | | | another company. |
| those individuals who have a bit of extra money | | | | If you know a merger is going to take place, buy |
| to spend, hedge funds may be just the way to | | | | a large amount of shares in the company that is |
| make money fast. | | | | going to merge. Once the merge takes place the |
| The establishment of hedge funds date back to | | | | values in these stocks increase dramatically. |
| the late 1940s and were developed by Alfred | | | | This is an extremely high risk investment because |
| Jones who was the father of unorthodox | | | | mergers that are often rumored to happen never |
| investment techniques. | | | | do. The activities of companies are often |
| One of his most successful techniques was selling | | | | unpredictable. |
| short stocks while buying long stocks. This is the | | | | Selling short is another great way to turn a profit |
| basis for how a hedge fund operates. Due to the | | | | on merging companies. This takes advantage of |
| number of guidelines associated with Hedge Funds | | | | the difference between present market price and |
| it requires much more money then normal stock | | | | the high purchase price in the event that mergers |
| vehicles. | | | | does take place. |
| Hedge Funds guide investors in making a profit in | | | | Hedge Funds are extremely beneficial because of |
| high risk investments. Hedge Funds use technique | | | | their level of security. Hedge Funds that belong to |
| called leverage. This is when the capital from a | | | | companies are kept private. This type of |
| company's investors is combined with borrowed | | | | investment takes place between a company and |
| money from a bank. | | | | individual - the government and other companies |
| The fee associated with Hedge Funds is called a | | | | are not involved. |
| incentive fee. This is a fee based on a portion, | | | | Hedge Funds do not need to file with the SEC and |
| instead of a percentage, of the clients profits. The | | | | are usually based in place that have less |
| fee is actually re-invested in hopes of making the | | | | regulations like the Cayman or Virgin Islands. Due |
| company even more money. | | | | to the secrecy Hedge Funds are often believed to |
| For the most part companies own Hedge Funds. | | | | be illegal and unethical. |
| Most people do not have enough money to meet | | | | However, this is simply not true. Hedge Funds are |
| the minimum initial investment to have their own | | | | a legal way to make a great profit. Remember |
| Hedge Fund. In 2004 alone Hedge Fund | | | | investing in Hedge Funds takes a great deal of |
| investments passed one trillion dollars. By the | | | | money and it is an extremely risky investments. |
| middle of 2004, 39 companies held 1.1 trillion dollars | | | | However, the immense pay off can change your |
| in their Hedge Fund. | | | | life forever, and certainly it is a risk that many |
| Making a profit from a Hedge Fund is all about the | | | | people are willing to take to be financial secure. |
| timing. The best time to invest in a Hedge Fund is | | | | |