How to Become Hedge Fund Manager

Hedge funds are one of the investment options online where you may earn some money. They are designed to place funds that can be directly invested into shares, commodities and bonds in order to earn positive returns. Funds are selected and chosen by investors who apply different strategies in the funds depending on the market conditions then present. The guidelines are governed by the Securities and Exchange Commission (SEC). These are open-ended investments which means investors can pool their money and withdraw or add money at any time.

People invest into hedge funds from different institutions and they use advanced strategies for it to be effective. To maximize income, you need to have the right program when starting to invest in this type of fund. There are different types of funds available and one needs to do the proper research ahead of time before choosing the proper fund. You should go to databases and compile significant research prior to making any investment decisions. You need to take into consideration the type of strategies, skills of the managers, market conditions, and other factors. Having a good grasp of the fundamentals is important, as any rushed decision may lead to a loss.

Hedge funds are more complicated to understand for the novice. They contain numerous tricks and are never easy to understand considering the ups and downs of the market. There are a lot of financial online companies who offer different kinds of funds and programs When you start with this investment, it is important to determine several factors in choosing the right hedge fund. Here is a rundown of those factors:

1. Genuineness: You don’t want to invest in a company that is a fraud or a scam. Remember to research if they are registered and if they are complying with the regulations from the SEC. If a company offers services that are too good to be true, then it is time to doubt if it is legitimate or not.
2. Reliability: Determine if the online company has a good reputation and make sure they offer reliable databases on their funds. A great database system contains detailed information on every aspect you can think of like monthly or annual performances, strategies and others factors. The more comprehensive the database the better.
3. Experience and Customer Service: Experienced financial companies offer assistance when you are a beginner investor in these funds. They should provide reports, performance statistics and experienced advisors to assist the investor when it comes to strategic investing.
4. Hedge Fund Manager: It is wise to learn about any of their services the manager has to offer. Discuss which types of strategies will be used, investment styles, and his knowledge of effective investing for the novice.

The growth of economic or macro trading has led to a significant increase in the identified managers in the Hedge Fund or Alternative Asset space. Specifically, global macro strategy refers to decision making based on global political, economic events which shape policy. This can extend to a wide range of events including austerity measures, political coups, interest rate and monetary policy changes etc. The growth in the number of funds focused on this strategy accelerated in the late 1990s with George Soros highlighted as the pioneer. His infamous bet against the Bank of England and the pound, illustrated how financially lucrative the strategy could be on a large scale.

A Global Macro manager in defining their portfolio allocation, will look at a wide array of economic data. Unlike other traditional styles including stat arb, or convertible arb, the judgment is made up to the manager and there is no formula for success. An example of a specific Global Macro situation is identified below:

Eg.

Hedge Fund Manager A is GM focused. He concentrates mainly on the commodity markets and identifies opportunities based on economic and political conditions and factors. In 2010, the Euro Zone announces that it will be supplying Country A with a bailout package due to short term liquidity problems in the debt markets.
Hedge Fund Manager A believes that Country B and C may also experience problems in this area, and he decides to look back historically at what commodities weakened or strengthened during such situations. In 1997, Gold rose spectacularly off the back of debt fears in Asia.
Hedge Fund Manager A then decides to go long Gold, forecasting a temporary squeeze in the equity and currency markets. Two months later, Country C announces a debt default pushing Gold to record levels.
Global Macro trading in essence focuses on the identification of situations and events rather than statistical modelling. Discretion and judgement are both key. Sometimes highlighted as ‘risk managers’, Hedge Fund managers that identify with this strategy focus on defining market movements based on economic theory. Like any other strategy, Global Macro has some identified risks which include:

Inability to effectively hedge
Possibility of swing away from traditional market movements (ie interest rate rises could have an adverse influence)
Determination of exit strategy: Difficult to identify the specific point of exit

If you really wanted to know how to make money, you might have talked with hedge fund managers and / or ponzi scheme organizers. It seems these two have too much in common according to the news. Thank goodness that the financial crisis and recession has laid most of these guys to rest and I would never suggest you get involved – although the money is pretty good!

Let’s define what a ponzi is. Basically, a ponzi scheme (named after its clever inventor) is a scam where enormous profits are promised and the greedy get their claws into it to invest. There is no productive effort behind the promised profits, because the next in line investors are sucked in to provide the “profits” for the suckers who came in earlier. Nice move. The only downside is that it may lead to a lot of free lunches at the government’s hotels (also known as jails). Who said there’s no such thing as a free lunch?

With that in mind there’s not much point in looking at the upside, is there?

Hedge funds were doing gangbuster for quite a few years. These are the guys who play Las Vegas with other people’s shares. Not much room for us there.

Las Vegas brings the idea of trying to make money at the casinos. No joke. Some poor (no pun intended) individuals actually go to these places feeding the insane illusion that they’re going to come out on top! Money make fast? You laugh – it’s tragic – especially when you see the obscene profits casinos make. I wonder if there is some connection between extreme profit, making piles of fast money, and the Mafia!? Pause for thought.

Let’s try horse racing, or even dog racing. Maybe not! You know what – this whole line of thought isn’t going to get us anywhere at all, is it? Luck is not where it’s at. You only get luckier when you work harder and smarter. Period!

Luck!? You only get luckier when you work harder and smarter.

Let’s get back to reality – put our feet firmly on the ground and look for something that really does work. If you want to find out how to start your own business, you need to follow a system. An ideal system should be somewhat like a franchise in that you get all the training resources you need – step-by-step. It should be cheap, accessible, and easy to start. Although the profit potential should be high, there should be no franchise type of monthly fee. As always in life, you must be willing to do the initial work. Not good if you’re lazy. If you were lazy, you wouldn’t have read this far!

There are a few, but very few, systems which fit the above criteria like a glove. This is time to start a new type of business, if you want to stay home, and are fed up with your work, and three jobs!

The ideal business should have built in potential to make you serious money long term and provide residual or passive income for years to come. Remember how artists get paid. They do a good job once, and then get paid royalty year in and year out for ever.