Absolute Returns: The Risk and Opportunities of Hedge Fund by Alexander M. Ineichen

By Alexander M. Ineichen

The realm of making an investment floats on an enormous sea of phrases, such a lot of that are seen, simple-minded, and clichés, and all of these are harmful to monetary health and wellbeing. the tale during this publication bears no relation to all that stuff. Ineichen’s message is unique, strong, entire, and necessary to strong monetary future health. The literary readability he blends along with his monetary knowledge is an extra blessing. –Peter L. Bernstein, President, Peter L. Bernstein, Inc., writer of opposed to the Gods and the ability of Gold

''No you'll find the money for to danger funds in hedge cash with out studying this accomplished advisor. the main points are illuminating, presentation attractive, research impressive and classes profound. an excellent contribution to the hedge fund literature.'' –Prof. Narayan Y. Naik, Director, Centre for Hedge Fund study and schooling, London enterprise college

''A sturdy figuring out of the operating of the hedge fund marketplace and hedge fund options is necessary for each energetic investor. Ineichen’s booklet does a very good task tying jointly old, empirical, and theoretical research in a manner conveniently available to practitioners. A extra accomplished exam of the hedge fund industry and hedge fund thoughts will be not easy to find.'' –Hans de Ruiter, ABP Investments, Senior Portfolio supervisor Quantitative fairness thoughts

''Hedge cash aren't mainstream and this booklet isn't mainstream both. the writer demanding situations conventional funding paradigms and how traders take into consideration hazard. an exhilarating learn and a needs to for each expert investor.'' –Dr. Burkhard Poschadel, leader government Officer, GAM

''Written for the pro investor, Alexander Ineichen’s e-book presents a finished, in-depth research of other funding recommendations. Combining the most recent study together with his personal insights, Ineichen has produced the definitive examine of hedge cash and cash of hedge funds.'' –Richard Elden, Chairman, Grosvenor Capital administration, L.P.

''Alexander Ineichen’s in-depth examine findings and analytical perception are introduced jointly during this ebook that's chock-full of invaluable facts on hedge fund concepts. Definitions, examples, return/risk parameters, and key possibility elements are supplied for every approach. This complete ebook is a need for each hedge fund investor.'' –Lois Peltz, President, Infovest21

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In three years she returned for more. com, March 6, 2002. 15 Introducing Absolute Returns noticed. This resulted in relatively little competition for investment opportunities and exploitable market inefficiencies. In the early 1970s there were probably more than 100 hedge funds. However, conditions eliminated most. The 1980s Only a modest number of hedge funds were established during the 1980s. Most of these funds had raised assets to manage on a word-of-mouth basis from wealthy individuals. Julian Robertson’s Jaguar fund, George Soros’ Quantum Fund, Jack Nash from Odyssey, and Michael Steinhardt Partners were compounding at 40 percent levels.

However, if $100 had been passively invested in the Nasdaq Composite index at the beginning of 1999 and transaction costs were zero, the portfolio would have declined to $89 by the end of December 2001 (an $86 gain in 1999 followed by a $97 loss in 2000–2001). * High returns as observed on the Nasdaq are good for headlines and selling financial magazines. However, these returns are an illusion in a long-term context. A volatile market-based strategy with returns such as 89 percent per year is an indication that the return figure might reverse in a linear fashion.

Less regulation means less protection for the investor and more flexibility for the hedge fund manager. Less protection means higher risk for the investor, for which the investor seeks compensation. As elaborated on in the appendix to Chapter 2, the reputation of hedge funds is not particularly good. The term “hedge fund” suffers from a similar fate as “derivatives” due to a mixture of myth, misrepresentation, negative Introducing Absolute Returns 35 press, and high-profile casualties. ” Skill-based strategies differ from traditional (marketbased) strategies.

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