Hedge funds are a great way to increase your wealth, according to a new study.
The report from the Boston Consulting Group and Boston University looks at the different types of investments that can make a portfolio more diversified and how to choose which ones to buy.
“The best hedge funds that I know of are hedge funds.
They’re highly diversified, and they have a low return on investment, which means they don’t have a lot of risk,” says David R. Anderson, an associate professor of finance at Boston University.
“They also have the potential to generate very large returns.
That’s why hedge funds have been such a popular choice.”
This chart from the BGC shows how a hedge fund can boost your portfolio of stocks.
(CBC) The study compared the performance of hedge funds against other types of funds.
In the case of funds that invest in real estate, the returns on investments like real estate equities and commodities are higher.
However, the results are similar to the performance for other types.
“There’s a large number of funds out there that are basically investing in stocks,” says John D. Mascarenhas, an assistant professor of economics at Boston College.
“But hedge funds can outperform those, and the best ones are the ones that are diversified.”
Anderson says that for most people, investing in an index fund is the best bet.
“If you have a portfolio of bonds, stocks, and equities, you can achieve a lot better performance than if you’re using a mutual fund,” he says.
For example, a fund that tracks the S&P 500 index is one way to do that. “
Investing in an ETF, in my view, has the biggest potential to help you achieve your investment goals.”
For example, a fund that tracks the S&P 500 index is one way to do that.
It would provide you with the best information on what’s going on in the market, and that’s great for diversification, says Anderson.
“It would provide a hedge against a lot more risk.”
Mascares analysis also suggests that a hedge account should only be used if you have the money to do so.
“Most people are going to put the money in a traditional savings account, but that’s not going to do you any good if you don’t know what you’re getting into,” says Anderson, who recommends that people think about the money they have when making a decision on what type of investment they should take.
If you’re just starting out, consider a fund with a low-cost index, or one that offers a higher percentage of its assets in stocks, bonds, or mutual funds.
“This isn’t a good option for someone who’s just starting with their career,” says Mascareas research director, Mark J. Lehner.
“You’re not going for returns in a conventional fund.
You’re going for return on invested capital.”
Investors should also look at their portfolio size.
If it’s smaller than it could be, a hedge will likely help you avoid a lot and save more.
If a fund is bigger than what you need, it may be worth a look, but don’t invest in it right away.
“For the most part, there’s a lot you can do with a fund,” says Lehner, who adds that some investors may not like the idea of taking on a bigger portfolio.
For instance, many people may think they have too much money in one asset class, but they could be missing out on a lot if they were to buy a smaller, more diversifying fund.
“A lot of the time, if you invest in a fund, you’ve probably missed out on the potential for dividends,” says Pascarenas.
“That’s what’s so great about a fund: If you don.t have to pay dividends, you won’t have to worry about inflation or other risks.”
If you are unsure if a fund might suit your needs, consider using an online fund manager that helps you find funds for your particular portfolio size and expenses.
“I’d say it’s pretty straightforward to go to an investment advisor and see what they have in place,” says D’Amico.
The research suggests that investing in a diversified fund will help you build a strong portfolio, but it may also result in lower returns.
“When you look at a fund’s performance against its peers, it’s not really clear what kind of return that’s going to provide you,” says R. David St. John, a professor of law at Boston Law School.
“In a diversification fund, the performance against the market is going to be lower than against the other funds in the portfolio.”
For the same reason, diversifying is probably not the best strategy for everyone.
“As long as you are taking a risk, diversification is a great thing,” says St. Johns. “However,