Gareth Henry’s article on Hedge Funds.
Gareth Henry wrote an article on modern hedge funds, a form of investment that is quickly growing in popularity amongst the wealthier investors. He splits the article into parts, including a section on what exactly a hedge fund is, the origins of hedge funds, some history, specifically on hedge funds and the financial crisis of the last decade, and finally the reasons behind this new popularity of hedge funds.
Gareth Henry starts off talking about hedge funds as a whole and different trends that we are seeing in the funds in the modern day. Investor allocations to hedge funds have risen from 12 percent to 28 percent in the past year alone, a staggering 16 percent climb that shows little signs of slowing down. Henry then states how the hedge fund has placed itself firmly in second place in terms of investor equity percentages, only sitting behind private equities. The two investment mediums are on par, but hedge funds have a much higher growth rate than private equity and will most likely overtake it in the near future. See more of Gareth Henry on facebook
Gareth Henry also outlines the origins of hedge funds. Essentially, hedging is a gambling term, meaning to bet on multiple things in the hope that the combined winnings will result in a profit. For hedge funds, it is the same idea, just with stocks. You invest a large amount of money into a multitude of risky stocks in the hope that you will turn a profit. Henry goes on to state how during the financial crisis, this incredibly risky investment strategy resulted in massive losses for those involved. But like the economy as well, hedge funds have recovered, and for those who stuck with the funds throughout the crisis, they have received an estimated 3 trillion dollars profit in US tender. Hedge funds are only truly available to the fabulously wealthy or to already accredited investors.
The trillions of dollars of profit combined with the current economy and stock market predictions have resulted in a surge of confidence towards hedge funds. Gareth Henry paints an incredibly optimistic future for the funds, and many people can expect monumental returns in the near future.