At the end of the day, the coronavirus and Covid-19 pandemic may have completely turned your investments on their heads and resulted in problems, or you may have made some wise investments in markets that might not have proven all too successful prior to 2020 and have been booming since. Of course, if you’re planning on investing right now, you’re going to have to do so carefully.
If you’re used to trying your own luck and going it alone, now is a time when it could be advisable to enrol the help of a third party who knows more of the ins and outs of the markets and can anticipate more changes and make wiser decisions. THis is where a hedge fund may come in useful. A hedge fund could potentially provide you with some impressive returns during these difficult times, while also allowing you to continue building your financial portfolio! This will also make you come across as attractive to investors or lenders going forward, when many are struggling with their credit score. If you’re relatively unfamiliar with hedge funds, here are some of the basics for you to look into!
Hedge Funds: The Basics
Let’s start out by determining what exactly a hedge fund is. Put simply, it’s a form of investment partnership that will see you and a group of other “limited partners” pool your money and other assets together. Once enough assets have been gathered, you will then entrust the assets to a general partner who will invest them in a range of markets on your behalf. Of course, with greater input can come greater returns. This partner may be an individual or they may be an investment bank such as Everblu Capital. Your hedge fund is likely to come with a mandate called an “investment latitude”. This is a form of agreement that determines where your pooled funds can and can’t be invested, giving you peace of mind that your assets won’t go anywhere that contradicts your morals or ethics, or anything you deem to be too risky. Generally speaking, most hedge funds are invested into real estate, stocks, and shares, currency and other popular markets.
Choosing a Partner
You should put a lot of time and effort into choosing a partner. After all, you’re trusting them with a lot. It’s best to seek out someone who has a lot of prior knowledge and previous experience in the field. This should cover a whole range of investments. Check their portfolio, read reviews and seek out trustworthy recommendations.
Are Returns Guaranteed?
Of course, returns aren’t always guaranteed. When you engage with hedge funds, you always engage with an element of risk. Make sure to fully think through your investments before going ahead and never invest anything that you can’t afford to lose.
Hedge funds can be pretty complicated and these, of course, are just the bare basics. But hopefully, some of the information can come in useful for you on your journey!
This is a contributed post.