Hedge Funds for Dummies

by Ann C. Logue

Book Overview

If you want to diversify your portfolio and lower your risk exposure with hedge funds, here's what you should know: Hedge Funds For Dummies explains all the different types of funds, explores the pros and cons of funds as an investment, shows you how to find a good broker, and much more.

Authored by Ann Logue, a financial writer and hedge fund specialist, this handy, friendly guide covers all the bases for investors of all levels. Whether...

• Format: Paperback
• Language: English
• ISBN: 0470049278
• ISBN13: 9780470049273
• Release Date: October 2006
• Publisher: For Dummies
• Length: 360 Pages
• Weight: 1.24 lbs.
• Dimensions: 0.8" x 7.4" x 9.2"

Customer Reviews

Hedge funds explained in simple English

We have heard this term, "hedge funds," so many times, but do we really know what they are? This is what this book is about. It explains in simple terms what hedge funds are, how they work, who invests in them, and how they are structured. Not all hedge funds are the same, just as not all restaurants are the same. The author says, "A hedge fund is a private partnership that operates with little to no SEC regulation." Hedge funds differ from other traditional investment companies such as mutual funds, pensions, and endowments because they have more freedom with different investment strategies. They are known for providing the manager with performance compensation. Since they have little SEC supervision, they are not for everyone. Only wealthy individuals can invest in them. This book does a great job introducing readers to hedge funds. - Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Great for Hedge Fund Managers Too!

Hedge Funds for Dummies seeks to create a "reference for the rest of us" on how to use hedge funds to improve portfolio performance. However, as a founder of a Private Investment Fund, this book really makes one think about all of the elements that you need to consider when potential investors are kicking your fund's tires. My copy is dog-eared and has writing throughout the margins. Regardless of whether you are thinking of starting a fund or thinking about investing in a fund, this book will be an excellent resource.

Credible Look at Basics of Hedge Funds

This book covers all the bases that an investor should consider before deciding to invest. They are too numerous to mention here, but in this 342-page primer, the author clearly explains the critical information necessary to make an informed decision as to whether a hedge fund is for you. Hedge funds have been in the news lately, but not necessarily for their supposed out performance characteristics. Nine hedge funds (for example, Amaranth Advisors) have closed their doors in the past year, some because of outsized bets by traders on the wrong side of the markets they were trading. This is not the way to increase performance. In 1998, Long-Term Capital Management blew up, even with two Noble-prize winning economists on the staff. All hedge funds are not alike and there risks that need to be taken into account. Hedge fund assets are estimated to be $1.2 trillion with over 9000 funds in existence. For most investors, due to the stringent entry requirements, hedge funds are not an option. Wealthy individuals who may be interested in hedge funds are urged to read this book (as well as others interested in learning about the subject) before placing their hard-earned money at risk. This suggestion may save them millions of dollars in potential losses, if they decide not to invest in certain hedge funds because of their due diligence learned from this book. Additionally, the author provides insight on setting up your own hedge fund portfolio by selecting different categories of investments. Surprisingly though, she spends a miniscule amount of time discussing exchange traded funds (ETFs) to build the hedge fund portfolio. Now that there over 425 ETFs offering all types of investment alternatives, this is one area that deserves more attention. Overall, the author provides a credible and detailed look at the hedge fund industry. An investor needs to know the basics before committing any money to these funds. This book provides useful information to help in making the decision to invest in hedge funds.

Fasten Your Seat Belts

Wow! This book sets a new standard for the "...For Dummies" series. It goes well beyond what you would expect from a book with such a whimsical title. Ann Logue is smart, her research is solid, and her writing is perfectly colloquial. No BS, no jargon. If you don't have an MBA, or if you earned it before hedge funds entered the scene, take Logue's corporate finance tutorial, meaning start from the beginning. If you don't need the background, then jump to Part III, beginning on page 165, dealing with hedge fund strategies. This book covers the history of hedge funds, their regulatory aspects, asset allocation, risk management, the Greeks, transparency, due diligence, and perhaps the most important aspect, where does the alpha come from? Read it for fun; read it for self-defense, or prep yourself for an interview, but do read it.

A comprehensive introduction to hedge funds

I hate to admit but this book is actually pretty good. Being a financial professional as well as marginally positively biased towards the hedge fund industry, the publication of this book initially caused laughter as well as sadness in the industry. The title alone is cause for laughter: Hedge Funds for Dummies. Hilarious. It is also sad: The industry becoming mainstream so fast is somewhat sad in a sense that it loses some of its exclusivity. The target audience is not, as the title rhetorically suggests, idiots but reasonably educated and curious people (essentially people who buy books for the purpose of acquiring knowledge and insight rather than public display). The reason for this book getting five stars is the following: Most books on hedge funds are written either by academics or practitioners. The books written by academics are quite often perceived as hoax by the investment profession because the content is abstract and dogmatic, i.e., a desperate attempt to fit the hedge fund phenomena into the corset of old paradigms such as "relative return investing" and EMH and CAPM whereas it too often transpires that the authors never have come even close to visiting or experiencing the dynamics of a trading floor in the real world. Books by practitioners on the hand often lack rigor and occasionally lack a sense for understanding the other side, i.e., the investors and their needs, requirements and constraints. Hedge Fund for Dummies finds an attractive balance. A balance between explaining or highlighting the theory including where the theory breaks down or is a poor description of investment reality on one hand and having the investor in mind on the other. In addition, we all would seriously be better off if this book were required reading for US Congress.