Hedge Fund Volatility

Hedge fund volatility is an especially important discussion now with the market and economy feeling distressed. The first thing to understand is what exactly a hedge fund is.

 

A hedge fund is a fund that can invest in short term or long term purchases, but the primary strategy is to remain in the stocks just as long as possible to maximize income and minimize risk to its shareholders, and to get out before the fund has lost money on that particular purchase. They are intended to give returns to its shareholders no matter what is happening in the market by preserving its original investment and getting in and out of stocks or bonds before they experience a downturn.

 

Hedge funds are open only to a limited number of investors, but are allowed to invest in a varied amount of types of things, like stocks and bonds, debts and commodities, and things like real estate which aren’t linked to the regular stock market. A hedge fund pays a commission to its manager for running the fund.

 

The difference between a hedge fund and a normal investors fund is that hedge funds invest in such a wide variety of types of investments, and most funds are only an option for very well to do investors. Also, the fund manager plays a much different role than a mutual fund investor, and researches all kinds of investment opportunities.

 

Volatility is an interesting concept when discussing hedge funds because usually hedge funds do not experience as much volatility as the normal market. But every fund is experiencing volatility at this time, and hedge funds, as well as regular investment funds are suffering from market volatility.

 

General market volatility is actually important to hedge funds, as the fund managers thrive on the wild market, so that they can invest in things at a low point and sell them before they hit the bottom. Strong fund managers can take advantage of market volatility and use it to their advantage to increase earnings.

 

It is important to be willing to invest in a fund for a reasonable amount of time, because funds are meant to go up and down in value, and it is best to find a fund that takes advantage of hedge fund volatility if you plan on investing in hedge funds.

 

Paradigm Capital Management is an expert hedge fund managing firm. The firm also launches and manages equity mutual funds and hedge funds for its clients. Paradigm Capital Management, Inc. was founded in 1972 and is based in Albany, New York with an additional office in New York City. Call at (518) 431-3500.

 

Read also: Hedge Fund Methods Open Up to the Small Investor – Through Mutual Funds

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What Makes Mutual Funds an Ideal Investment?

A mutual fund is a collection of stocks and/or bonds similar to a company that, along with a group of people, invests money in stocks. It is an investment pool where many investors for the purpose of investing in stocks, bonds, money market instruments and similar assets. In a mutual fund, the investor gets a proportional share of the fund’s gains, losses, income, and expenses. It is similar to buying a small slice of a big pizza.

 

To many people, investing in mutual funds is like buying it since the investor has the choice to invest in a product according to his/her choice and comfort. Investments are often mistaken with keeping your money in a saving account and especially mutual funds has still not got much understanding amongst youngsters. Having said that, if you can get proper information and knowledge about mutual funds, you will realize that it is one of the best ways to earn the profit.

 

For clear picture about this product, you must understand the objectives. So, here are the objective of mutual funds in a simple and easy way.

 

Objectives of Mutual Funds:

 

  • Equity (Growth) – In this product, the investment is done only in stocks.
  • Debt (Income) – Here the investment is done only in fixed-income securities.
  • Money Market (Including Gilt) – Under this fund, the investment is done in short-term market instruments including government securities.
  • Balanced – As the name suggests, the balance is maintained and hence the fund is put partially in stocks and partly in fixed-income securities.

 

How can you make money?

 

Once the functioning of mutual funds is clear, a new player of this game would be looking for the direct and simple ways with the help of which he/she can make money. So, here are the three ways to make money:

 

  • The earning comes from dividends on stocks and interest on bonds. A fund pays out all the earnings or income over the year to fund owners in the form of a distribution.
  • If the fund sells securities that have earned profits, its capital increases. Most funds also pass on these gains to investors in a distribution.
  • If fund holdings increase in price but are not sold by the manager, the fund’s shares increase in price and at this moment you can sell your mutual fund shares to enjoy more profits.

 

Benefits of Mutual Funds:

 

One of the most important a person looks for before investing his/her hard earned money is its advantages. A smart investor would always be interested in understanding the uniqueness of a particular product. So, here it is:

 

  • Professional Management – The foremost advantage of funds is that here the funds are managed professionally.
  • Diversification – The term diversification means that you invest in a large number of assets and hence the risk is spread out. So, the more stocks and bonds you own, the less are the chances of loss.
  • Liquidity – A mutual fund allows you get your shares converted into cash at any time.
  • Simplicity – Buying a mutual fund is one of the easiest investment as it can be started with a small amount on a monthly basis.
  • Economies of Scale – Since, a mutual fund buys and sells large amounts of securities at a time, the transaction cost is lower as compared to what an individual would pay for securities transactions.

 

The Mantra to get more returns:

 

Many of us are not aware of the fact that mutual fund investments need patience. As per the data, those who have invested money for a longer tenure irrespective of the profits they were earning, they have got higher returns. Also, a genuine fund advisor would always suggest you to continue the investment for a longer tenure and start with little.

 

Young investors can start early and can go for growth plans in mutual funds whereas it is ideal for the people looking for retirement these funds have retirement plans. For risk-averse investors, liquid plans and fixed maturity plans prove to be healthy when the FD rates are not so favorable.

 

For more details you can consult with the experts at Paradigm Capital Management – a trusted leader in small cap investing. Call at (518) 431-3500 to learn more about how our capabilities align with your long-term goals.

Or visit here: http://paradigmcapital.com/

No Load Mutual Funds – Are They a Smart Investment Choice?

If you want to start investing but don’t know the first thing about where you should your money, then mutual funds are a great way to get started. They essentially consist of a pool of money which is then allocated into assets such as stocks or bonds. What this essentially means is that your investment into a particular fund will give you holdings in different assets thus reducing your overall risk.

 

Of course, like with stocks and other assets not all mutual funds are created equally as there are literally hundreds of available funds. Load mutual funds charge a fee which pays the salary of the board of advisers. The fees typically vary but are usually a small amount so if you earn $100 you might get back $96 after all the fees.

 

On the other hand, no load mutual funds do not charge a fee to investors and are generally available to anyone. Given today’s economy, are no load mutual funds inferior to those that charge a fee for their services? Any manager that “guarantees” a return on your investment is only out to get your money so be extra careful of those who promise a return.

 

While there are most definitely those funds that charge a fee that do exceptionally well, the return you can expect to get will be significantly lower once all the fees are factored in. If you are just starting out, then it is suggested to invest in those funds that do not charge a fee. Stable stocks such as from oil and utility companies typically stay consistent and pay out decent dividends.

 

No load mutual funds are excellent investment vehicles as they allow you to diversify and reduce your risk. Be sure to always do your research ahead of time into a particular fund you are interested in and use resources to gather further analysis. The last thing you want is following a hot tip that turns out to be a dud because you didn’t do your research.

 

Paradigm Capital Management is a trusted leader in small cap investing. The Paradigm Funds family of no-load mutual funds makes the firm’s small-cap and SMid-cap strategies available to fee-based financial advisers and retirement professionals. Paradigm Funds are widely available on more than 50 no-load platforms.

To learn more about how Paradigm Capital Management’s capabilities align with your long-term goals, please contact us at (518) 431-3500

Discovering Low Minimum Mutual Funds

Low Minimum Mutual Funds

Low minimum mutual funds can make all the difference in when investors actually get to start putting money toward their futures. Anything from poor performance to exorbitant fees or an inexperienced manager can cause problems once a person has started their mutual fund, but many high minimum investments keep people from even beginning their funds in the first place. The following article will take a look at low minimum mutual funds for prospective shareholders to consider buying into.

 

Finding Low Minimum Mutual Funds

Fortunately, there are investments you can begin with much less than several thousand dollars. It’s perfectly reasonable to not have a lot of cash lying around to begin your initial investment. Many people are in the middle of supporting a family, putting children through school, or reserving money for other things, like an emergency fund. Lower minimums attract novice investors to funds because of their accessibility.

 

The Downside Of Low Minimums

A smaller minimum isn’t always a good thing though. A lower minimum often means more shareholders. More shareholders mean that more records will be kept, which raises the potential for higher ongoing expenses. This means that funds with higher minimums may actually have less expenses. Companies like Vanguard use high minimums on purpose to keep their most profitable funds from seeing too many new investors. And there are situations in which a higher minimum can be outright waived for you if you become part of an agreement saying you’ll make contributions through an account regularly. Advisers can also help you sidestep a high minimum investment.

 

Finding Low Minimum Funds

With a long history of small-cap investing, Paradigm Capital Management is a trusted leader in small cap investing. The Paradigm Funds family of no-load mutual funds makes the firm’s small-cap and SMid-cap strategies available to fee-based financial advisers and retirement professionals. Paradigm Funds are widely available on more than 50 no-load platforms.

 

To learn more about how Paradigm Capital Management’s capabilities align with your long-term goals, please contact us at (518) 431-3500

For more info, please visit here: http://paradigmcapitalmanagement.weebly.com/