Hedge Fund Definition Simply Written in Wall Street Journal

Want to know the hedge fund definition and meaning? Read further to learn what is a hedge fund all about? Is it like a mutual fund or index funds?

A reader asked this question, after he read the different financial terms. If you have any other definition and meaning of the word hedge fund, please share it in the comment box.

Obviously, the hedge fund manager is the one who invest the funds of the investors. The fund manager is the one who make a research so that the pooled investments will earn a profit.

Hedge Fund Definition Written in Wall Street Journal

According to the book entitled “Lifetime Guide to Money: Everything you need to know about managing your finances for every stage of life” written by the Wall Street Journal Personal Finance Staff headed by C. Frederic Wiegold, the meaning and definition of hedge fund is;

Hedge Fund : “A little-regulated, private investment partnership that may invest huge sums in currencies, bonds, and stocks worldwide. Despite the name, may hedge funds do not necessarily hedge. In deed, the spectacular returns and mighty tumbles for which they are known often result from mammoth market best using borrowed money. Hedge funds typically require minimum investments that start in the hundreds of thousands of dollars.”

To make things clear, here we should define the word “hedge”, using the same reference.

Meaning and Definition of Hedge – “An investment strategy designed to limit the risk of loss. For instance, someone who owns airline stocks might buy an oil stock to hedge against the damage to airlines of rising oil prices”

Reference: C. Frederick Wiegold, Personal Finance Editor, The Wall Street Journal Lifetime Guide to Money, 1997 Hyperion, New York USA, page 496

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