How to Choose a Hedge Fund

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A hedge fund is a hedge against a stock or a series of stocks that are dropping in value. Discover the importance of risk tolerance when considering hedge funds with help from a registered financial consultant in this free video on investing and money management.

Part of the Video Series: Investment Basics
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This is financial adviser Patrick Munro talking about how to choose a hedge fund. A hedge fund is just that, is a hedge against a stock or a series of stocks or investment strategy going south and going down and the way to choose a hedge fund is to really look inwards at yourself and look at outward trends and decide which ones are perhaps fading. Such as the fortunes of American car makers. If you were to vote against that through a hedge fund, you might make out very, very well. However if the bailout package offered by the current president is successful and the car makers take the money and emerge with a great technology and put Toyota out of business, that would not be a good hedge fund to be in because you would be betting against the car makers that end up prevailing. So really you have to be aware of risk tolerance and be conscious of what is out there. That is the best way to choose a hedge fund. This is financial adviser Patrick Munro.

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