I ve started learning about the market but I dont know what hedge funds are. Please explain
In: 17
While on average, market goes up, they are cycles, and you want your money to be relatively constant and not swing up and down
When oil goes up, steel goes down;
When steel goes up, oil goes down.
You give a manager who is supposed to be good with math and buy a balance of steel and oil, and make sure in the long term you make 10% every year.
Steel and oil in this case represents things the ppl invest in that goes in different direction, hence “hedge”.
Other examples include, bonds and housing, gold and stocks,
At least, that’s was the theory. Any more explaining would not be for 5 year olds
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