5

If you’re interested in Soros, his books are all worth a read. He is a strange and alchemic mix of analysis, philosophy, gut feel/biological feedback and student of history. Arguably his fundamental skill has been his insights and bets around reflexivity and its consequences on markets. He was also one of the earlier financial stars to embrace Popper and ...


5

What is the importance or benefit of the assumption that high-risk is preferable for younger people/investors instead of older people? Law of averages most high risk investments [stocks for examples, including Mutual funds]. Take any stock market [some have data for nearly 100 years] on a 15 year or 30 years horizon, the year on year growth is around 15 to ...


4

Hedge funds are a form of fund, an adjective and noun. Short selling is a concept and action, an adjective and verb. Those are the primary differences. Hedge funds aren't obligated to take advantage of bearish markets, or even hedge their positions. The title is a misnomer related to a distinction created in bygone days. Short selling is an action. Where ...


4

There's two reasons. One is that you have a longer time horizon, other answers cover that. The second is that for someone who is younger, most of their capital is human capital in terms of their future work output (and earnings). If you're 25 and your $20,000 portfolio gets wiped out, that's only a small amount of your total earnings. You still have 45 ...


4

The reason that you are advised to take more risk while you are young is because the risk is often correlated to a short investment horizon. Young people have 40-50 years to let their savings grow if they get started early enough. If you need the money in 5-15 years (near the end of your earning years), there is much more risk of a dip that will not ...


4

So the pros are pretty simple: You in effect limit your currency risk and just get exposure to the 'true' return of the index of it's native currency. They also are generally able to hedge much cheaper than you could due to access to wholesale rates etc. Put simply: you lower your short term variance by mitigating the exchange risk. But, and here comes the ...


3

Isn't a particularly clean answer to this question, but roughly: Investment banks generally are sales entities, raising and selling corporate debt to clients who want to buy/sell bonds etc, and working on rights issues/ipos and selling stock directly to people who want to own parts of companies. These are (mostly) singular transactions that are done and ...


3

The short answer is no. For mutual funds and ETFs (index funds are generally either mutual funds or ETFs), the price has changed (up/down 20%) and is a gain or loss for the people who owned the fund during the change. You would buy at the new higher or lower price (up/down 20%) the next day and would feel only the gains and losses from that time until you ...


3

I would like to specifically address your second question. There are a number of great resources available online, but I found that when I was first starting out the website Investopedia was a very helpful resource. There you will find a wide range of information regarding investing, investment vehicles, and glossaries of key terms with robust definitions ...


3

An investment trust is quoted just like a share. You just compare what you paid (your book cost) with its current share price, not the NAV, as a trust's price can be at a premium greater than the actual share price or a discount.


3

Private Equity is simply some type of an investment company, which is owned in a way not accessible to the public. ie: Warren Buffet runs Berkshire Hatheway, which is an investment company which itself is traded on the New York Stock Exchange. This means that anyone can buy shares in the company, and own a small fraction of it. If Warren Buffet owned all the ...


3

If you spent your whole life earning the same portfolio that amounts $20,000, the variance and volatility of watching your life savings drop to $10,000 overnight has a greater consequence than for someone who is young. This is why riskier portfolios aren't advised for older people closer to or within retirement age, the obvious complementary group being ...


2

There may be differences in different contexts, but here's my general understanding: Rate of Return (or Return on Investment) is the total gain or loss of an investment divided by the initial investment amount. e.g. if you buy stock for $100 and later sell it for $120 you have a 20% Rate of Return. You would have a 20% ROR regardless of if you sell it ...


2

One is a trade strategy (shorting a security) and one is an investment fund (hedge fund). It's often said that taking an inverse position to offset the risk of a decline in another position is a hedge strategy (you're hedging your risk). Buying some put contracts on shares you own is a hedging strategy, because it gives you the option to sell your shares ...


2

It is possible to get foreign loans at lower interest rates. This can become good or bad based on the currency fluctuation. Market participants likes to pretend this is all "priced in" in such a way that nobody can benefit from taking advantage of lower interest rates in a different currency, but there are many ways to take advantage of this, and many do. ...


2

It is possible to get a loan from foreign banks in USD. It carries currency risks. Generally done by large companies. Is this what is called hedging or hedge funds ? hedging is very different concept. The investopedia article is a good starting point


2

I think you're misunderstanding the purpose of CFDs and hedging. When you use a CFD for hedging, you're not buying and selling the same instrument, you're using one instrument to offset risk in another. Suppose you're a German manufacturer and have a large order from a Russian customer, who can only pay in Rubles when the order is delivered in 9 months. ...


2

Your edit indicates that you may not yet be ready to get heavily involved in investing. I say this because it seems you are not very familiar with foundational finance/investing concepts. The returns that you are seeing as 'yearly' are just the reported earnings every 12 months, which all public companies must publish. Those 'returns' are not the same as ...


2

I like the un-hedged dollar-based investment because it diversifies the euro home-currency position.


2

A hedge fund will customarily keep individual company dividends for itself, and account for them as a increase in the value of the shares. It may elect to make a "fund" dividend to its partners out of the individual company dividends, but Mr. Buffett is not noted for paying dividends. Even years later, when his hedge fund had morphed into a corporation ...


1

A hedge fund is for accredited investors only. Some futures brokers offer automatic-trading software that they are familiar-with. Or managed-futures can be found. But I would recommend closed-end-funds. A CEF is a mutual fund that trades on the stock market and then doesn't make redemptions. Since the CEF doesn't make redemptions then it can use leverage ...


1

The Hurdle Rate isn't a strictly defined value. Each fund will have a different formula for what the rate means to them. Maybe it's x% over the S&P 500 or it could be 90% of the 5y moving average of the fund. If you look at the prospectus of a given fund, they may explain the derivation of the value. Often it may be considered proprietary information and ...


1

Using this Calculator and setting up 3 cases: 1. annualized interest rate = 5% 2. annualizud interest rate = 5% - 0.05% 3. annualizud interest rate = 5% - 0.10% The results are (balance): 1. $1,628.89 2. $1,621.15 3. $1,613.45 Earnings $: 2. My gain is $621 and ETF earned $7. 3. My gain is $613 and ETF earned $15. Earnings %: 2. Me: 98.77% ETF: 1....


1

Using a tool like https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php you just compare the values of the expected annualized rate minus the relevant basis point cost in each case and see what the difference is between the two.


1

I'd invest into funds denominated in other currencies (like Nikkei225 in YEN, FTSE100 in GBP). With this approach you will diversify your investment and currency exposure at the same time. No one would hedge a 20 year currency exposure as it was mentioned previously.During such a big time horizon it is even possible that you will obtain liabilities in USD, ...


1

Simple answer: it depends significantly on the liquidity of the assets being managed, and the mix of liquid (e.g. listed stocks) and illiquid assets (e.g. the unlisted equity of a wholly owned subsidiary). The term you want to search for is "fiduciary duty". It applies broadly, if not necessarily equally, to asset managers and corporate managers in the US (...


1

I don't know what transpired on the show "Billions" so I can't address their position or how they managed it. If you correctly described Axe's statement, it would be incorrect. XIV is exchange-traded note (ETN) that is designed to provide inverse performance of the VIX. So you several choices to avoid further losses during a drop: You can close your ...


1

Brokers will have transaction fees in addition to the find management fees, but they should be very transparent. Brokering is a very competitive business. Any broker that added hidden fees to their transactions would lose customers very quickly to other brokers than can offer the same services. Hedge funds are a very different animal, with less regulation, ...


1

There is no rule-of-thumb that fits every person and every situation. However, the reasons why this advice is generally applicable to most people are simple. Why it is good to be more aggressive when you are young The stock market has historically gone up, on average, over the long term. However, on its way up, it has ups and downs. If you won't need ...


1

I'm going to diverge from most of the opinions expressed here. It is common for financial advisors to assume that your portfolio should become less risky as you get older. Explanations for this involve hand-waving and saying that you can afford to lose money when young because you have time to make up for it later. However, the idea that portfolios ...


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