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What are the disadvantages of hedge funds?
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11th Dec 2009 by JonB
The biggest disadvantage of hedge funds is probably that, by federal law, one must be accredited in order to invest in one. The term can be ambiguous, but usually an accredited investor is someone who has at least $1 million in liquid assets and earn at least $200,000 a year. Hedge funds are usually thought to be more risky than mutual funds, but in reality this is debatable. Also, even if one didn't have to be accredited, it is likely that the average investor would find the minimum investment for most fund to be too steep.
The biggest disadvantage of hedge funds is probably that, by federal law, one must be accredited in order to invest in one. The term can be ambiguous, but usually an accredited investor is someone who has at least $1 million in liquid assets and earn at least $200,000 a year. Hedge funds are usually thought to be more risky than mutual funds, but in reality this is debatable. Also, even if one didn't have to be accredited, it is likely that the average investor would find the minimum investment for most fund to be too steep.
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9th Dec 2009 In Investing
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