Funds

Hedge fund:Absolute return. Positive return of value

Mutual fund: Relative return. Relative to the index. If index is down by 10% and fund manager has lost 8%, he is doing fine on relative termsl

Leverage: buying stocks on margin – that is using borrowed money to buy stock

Short selling: Strategy to take advantage of falling prices, i.e. selling borrowed stock then buying it back at a lower price & return back the borrowed stock

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s