Hedge Funds.Characteristics Example For Free - Free Essay Example

Sample details Pages: 7 Words: 2138 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Institutional investment is defined as financially advanced investment forms that endow in substantial volumes. These are in the form of portfolios normally including large numbers of investments. Because of such advanced characteristics, the institutional investments are frequently done, involving private security placements; so as to escape from the securities regulations. Don’t waste time! Our writers will create an original "Hedge Funds.Characteristics Example For Free" essay for you Create order Hedge fund is one sort of institutional investment This fund was introduced by Jones in 1949. He set up hedges through investment in securities chosen from the set of undervalued ones and funding such long term positions a part through short positions in some overvalued securities, Thus through these hedges, a market neutral position is created. Also, these funds were designed in such a way that incentive fee compensation was paid as a percentage of the profits attained from the clients assets. Besides, he invested his own capital in that fund to ensure an investment partnership. There is no specific definition about hedge funds but according to some authors, defines hedge fund as an appropriately assertively managed portfolio of investments using advanced strategies for investment including leveraged, long, short position and derivative trade in domestic as well as international markets to generate higher returns. explains that hedge funds are set up or established in the form of private investment partnerships which are available for a restricted set of investors requiring quite large initial investment. Hedge funds investments are illiquid in nature (mostly) because the money invested by any investor is not assured to be there for a long term i.e. at least for one year. Unlike mutual funds, hedge funds in majority of states are unregulated, since they cater or involve sophisticated investors. Hedge funds can be regarded as mutual funds designed for the super rich individuals. Such hedge funds are similar to mutual funds in the sense that in both funds, investments are to be pooled and further professionally managed. Still, significant difference is there in terms of flexibility of investment strategies. Hedge funds hold their origin in a popular risk management term i.e. hedging. Hedging is actually the practice of risk reduction, but on contrary, the aim behind most of the hedge funds is maximize the return on investment. Nowadays, dozens of differ ent investment strategies are used by hedge funds, thus they are just not meant for hedging risk, but with a speculative investment attitude of hedge fund managers, such funds involves more risk than the overall market. CHARACTERISTICS OF HEDGE FUNDS A variety of financial instruments are utilized in Hedge funds to condense the risk, improve returns and minimize the degree of correlation of the fund with the equity and bond markets. Majority of the hedge funds are flexible as far as the investment options are considered. These can employ leverage, short selling, derivatives like puts or calls, futures, etc. In terms of investment returns, instability and risk, Hedge funds are enormous. Most of the hedge fund strategies are aligned towards the goal of hedging against downturns in the markets being traded, but not all of them. Non market correlated returns can be generated through some of the hedge fund strategies In majority of the hedge funds, objective is to maintain the consistency of returns and preservation of capital rather than maximization of returns magnitude which is the best way to attract sufficiently large capital inflows along with retention of investors. Hedge funds are managed with the help of some experienced as well as disciplined and diligent investment professionals. Main investor group for hedge funds is the Pension funds, endowment funds, some private banks, insurance companies and HNIs (high net worth individuals). Aim of this investor group is to minimize the overall portfolio volatility and add to returns Managers for Hedge funds are usually specialized in particular sectors and trade only within the area of expertise. Managers remuneration in hedge funds is heavily weighted with the performance incentives to attract the best talent in this business, but this can also result in undue risks. Hedge funds largely involve the funds of the managers also, giving it a look of investment partnership form and assuring the investors for personal interest of the managers RETAIL INVESTORS According to retail investors means individuals, involved in buying and selling securities for themselves on their own account via traditional as well as online brokerage organization. Individual investors have reasons to make investment. This investment can be short or long-term goals such as providing for their ward good education, saving to acquire land, houses or setting up their own establishment in the near future. Retail investors invest a portion of their pay check in the workforce, in order to shoot the accumulated funds to provide a retirement earnings or to give part of their assets to their wards. individuals are investing for growth and to make sure all their investment are not in vain therefore they intend to invest in companies that makes a lot of profits and to bring good returns. ADVANTAGES OF INVESTING IN HEDGE FUNDS Through traditional asset allocation, use of equities, bonds, real estate and private equity investment can be optimized in a portfolio which result in return maximization and portfolio risk minimization. The same objective is pursued by hedge funds, as a result of which hedge funds have become a natural candidate for investment consideration. Hedge funds are commonly believed to have superior returns then retail or other investment alternatives. A professional management of fund minimize the risk associated with non research based investment decisions Returns of the Hedge funds have a very low correlation with the returns of the traditional asset classes such as debt, bond, equity etc. This lower correlation gives an advantage of the diversifying effect on a portfolio. Thus, asset classes with diverse correlations are not going to react in the similar way to the market conditions. As majority of the well-managed hedge funds do not act in alignment with the market movements, thu s they have an inbuilt ability to stabilize the portfolio returns during market uncertainty Hedge funds have a relatively low volatility. Institutional investments, by allocating more to alternative investments have reduced the overall portfolio volatility. Volatility is a measure of fluctuation. By less volatility, one can refer to more stability or minimized extremes associated with the portfolio. Hedge funds have the potential to realize sufficient returns for aggressive investors. One of the strongest reasons behind hedge fund investment is the nature it has to offer steadying hand over time for well-diversified portfolios In addition to the traditional hedge funds, many relatively new specialized hedge funds are popular. These are referred as hedge fund-like mutual funds. Such funds are basically mutual funds, which are engaged in hedging techniques up to some extent. Such funds offer certain advantages over the traditional ones including greater liquidity, lower fees, lo wer leverage and better transparency. Also, fund of funds are popular among the retail investors. Fund of funds is a hedge fund which invests in other hedge funds. DISADVANTAGES OF INVESTING IN HEDGE FUNDS Primarily, Hedge funds are speculative investment vehicles that employ a strategy of aggressive investment to magnify the returns. Such funds usually comprises of high end clients. This is because of the strict criteria posed on investors to fulfil, so as to partake in hedge funds. These funds are not regulated ones which is a serious limitation in account of the retail investor. This lessens the security factors of the funds. Main disadvantages are discussed in the below section Higher minimum investment amount requirement is a main disadvantage associated with hedge fund investments. Retail investors cannot invest in hedge funds due to this reason. But, this limitation has been resolved up to some extent by introduction of fund of funds. Also the Hedge funds involve great risk to generate higher returns. Hedge funds are comparatively less liquid. Investors are not able to buy or sell them whenever they wish. Also many a times, Hedge funds are mispriced. Because of this misp ricing risk, retail investors find it a less attractive investment alternative. As management fees are performance based, so there is a chance that managers could start taking much higher risk. This may be unfair for the retail investors. Hedge funds involve speculation based investments and rumor based investments. Besides all these, many complex management biases are involved in hedge fund investments RETURN AND RISK OF HEDGE FUNDS Hedge funds have become popular asset class among the HNI investors, since the early 1990s. The amount invested globally has rose from around $50 billion in 1990 to around $1 trillion by the end of 2004. As substantial leverage is used in these funds, a far more important role is played in the global securities markets by hedge funds. Hedge funds are bundled with some management biases. Correcting for such biases, hedge funds have lower returns than the supposed level. Furthermore, the funds have lower correlations with the market equity indices and thus are excellent diversifiers. Such funds are very risky. The cross sectional volatility and individual hedge fund returns, both are greater comparatively to the traditional asset classes. Considering the Hedge funds to be similar in risk terms to the other types of investments is a mistake. Risk in other asset classes is measured by quantitative metrics, but in case of hedge funds, risk is measured in qualitative terms making it u nique to evaluate and analyze. The most common measure of risk used for both hedge and mutual fund analysis is the standard deviation. Here, it is the level of instability in returns. Standard deviation gives a good indication of the variability of annual returns and makes it easy to compare to other funds when combined with annual return data. For instance, to compare 2 funds with similar annualized returns, fund with relatively lower standard deviation should be more attractive Particularly for hedge funds, StDev is not considered sufficient to capture total risk depiction of returns as for majority of the hedge funds, returns are not normally distributed. But, the standard deviation assumes a normal bell-shaped distribution where similar probability is assigned to different return prospects above and below the mean. Hedge funds involve several interesting characteristics which influence the performance. These include strong managerial incentives, sophisticated investors, fl exible investment strategies, substantial managerial investment and limited government oversight. Researchers have observed that hedge funds have consistently outperformed. Hedge funds are more volatile and their returns have been widely discussed in the literature. According to researchers Brooks and Kat, the published hedge fund indices are normally distributed exhibiting relatively low skewness. Return is measured and evaluated with the use of descriptive statistics mean and median. The risk is measured by the second and fourth moment. From investor perspective, this combined characteristic is important having derived with sufficiently weak assumptions with respect to investors utility functions that investors prefer first and third moments i.e. mean and skewness higher and second and fourth moments i.e. standard deviation and kurtosis lower. Higher value of skewness implies asymmetrical distribution of returns with the mean return sufficiently higher than median. Also, for hedge fund survival probability, profit analysis is designed. Here, a funds probability of survival is measured. A funds time to survival or more specifically the duration of a fund is examined in this method. Duration of a hedge fund is the time until a fund gets failure CONCLUSION In terms of investment returns, instability and risk, Hedge funds are enormous. Most of the hedge fund strategies are aligned towards the goal of hedging against downturns in the markets being traded, but not all of them. Hedge funds are managed with the help of some experienced as well as disciplined and diligent investment professionals. Main investor group for hedge funds is the Pension funds, endowment funds, some private banks, insurance companies and HNIs (high net worth individuals) and families. Aim of this investor group is to minimize the overall portfolio volatility and add to returns. Hedge funds largely involve the funds of the managers also giving it a look of investment partnership form and assuring the investors for personal interest of the managers. The primary aim of most hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive (absolute) returns under all market conditions. Although the returns from hedge funds are significantly high, still these are not able to attract the retail investors. Retail investors profiles are not matched with the investment motives behind the hedge funds. Hedge funds can be regarded as mutual funds designed for the super rich individuals. Such funds are similar to mutual funds in the sense that in both funds, investments are to be pooled and further professionally managed. Still significant difference is there in terms of flexibility of investment strategies. For retail investors, who are interested in realizing the higher returns from hedge funds as well as invest in lower proportion have the option of fund of funds.

Why We Crave Horror Movies - 858 Words

In his article â€Å"Why We Crave Horror movies,† Stephen King stresses the fact that we are all â€Å"mentally ill,† and explains why watching horror films is an effective way to deal with our inner insanity. According to King, we are all insane by human nature, and are made up of â€Å"anticivilization emotions.† These emotions are integral parts of our personalities, and in order to stay healthy, they â€Å"demand periodic exercise.† But living in society has taught us to repress these emotions, which is why he argues that watching horror films provide us with this psychological relief, allowing us to indirectly deal with â€Å"anticivilization emotions.† According to King, horror movies â€Å"deliberately appeal to the worst in us,† and therefore, perform the â€Å"dirty job† of satisfying our inner monsters. I disagree with King because horror movies can also have negative effects. In addition, people have different ways of channe ling out uncivilized emotions. Horror movies can have negative psychological effects. Although some people enjoy the thrill and nastiness of horror movies, I, for one, do not. Watching horror films give me nightmares, and make me extra paranoid. Rather than my inner psyche feeling â€Å"satisfied,† I feel disturbed. Watching horror films can also cause heightened stress and anxiety. Under more serious conditions, horror films can even cause PTSD, or Post Traumatic Stress Disorder. A woman named Caroline appeared on the Dr. Phil show, who after watching a horror film called Psycho,Show MoreRelatedWhy We Crave Horror Movies1362 Words   |  6 PagesAccording to Stephen King’s essay â€Å"Why We Crave Horror Movies† he draws viewers into horror stories like the one above simply because we crave it. King claims in his essay we obsess over the wanting of horror as if we are daring the nightmare. The human condition is finally allows people to enter the totality of anti-civilization behavior. Many presume this to be false because the horror genre only offers a sense of something grim. However, King’s ideas are accurate because we do go to have fun, and ourRead MoreWhy We Crave Horror Movies860 Words   |  4 Pages Well, we have got just the cure for you. Here is a sure-fire method to re-establish your normality while having a fun and exciting time; all you really need to get back on track is a good dosage of a gory horror film! According to Stephen King, America’s best-known writer of horror fiction, horror movies can serve a valuable purpose. In King’s Playboy-published essay, â€Å"Why We Crave Horror Movies,† he examines the popular trend of attending horror films, and he provides several explanations forRead MoreEssay Why We Crave Horror Movies808 Words   |  4 PagesIn the essay, â€Å"Why We Crave Horror Movies† Stephen King attempts to explain why we love horror movies, and he gives a few different reasons why people go to see horror movies. People want to show that they are not scared; people want to have fun; but the main reason that he suggests is that we are insane and we need to watch horror movies to keep that insanity locked up in society. He uses a variety of argumentative strategies and literally decides to prove his thesis. On the other side, King surprisedRead MoreWhy We Crave Horror Movies Response1405 Words   |  6 PagesBradfield MWF 11:10-12:00 PM 20 January, 2016 Why We Crave Horror Movies Response In Stephen King’s essay, â€Å"Why We Crave Horror Movies,† the author exemplifies a present-day approach to thinking about the genre of horror. King offers three explanations for why people go to see horror films: to psychologically relieve ourselves, to exercise our fears, and to establish our feelings of essential normality. He claims that watching horror films is not just a trend, but a necessity to fulfill ourRead MoreEssay on Why We Crave Horror Movies1046 Words   |  5 Pagesessay, Why We Crave Horror Movies by Stephen King the author tries to prove that the modern day horror movie is are relief of violence, are fix of adrenaline and fun, and also something that can dare the nightmare. In a lot of ways these things can be related to real life situations. My relief of violence is playing video games, and my fix of fun and adrenaline is when I play football, and something that dares my nightmare is when I challenge my brother. In the essay, Why We Crave Horror MoviesRead MoreWhy We Crave Horror Movies By Stephen King854 Words   |  4 Pages(King, 2011, p. 561). Stephen King, a prolific author who writes popular horror novels (some of which have been turned into films themselves), wrote that opening sentence in his article about people’s love for horror films. In his article, â€Å"Why We Crave Horror Movies†, King argues that our sanity places itself front and center, whenever someone watches a horror movie. King states that there are the obvious reasons why we enjoy horror films, such as the search for a thrill or the simple amusement of theRead MoreStephen King Why We Crave Horror Movies Analysis799 Words   |  4 Pageswatching horror movies. Either they are surrounded by friends or family that enjoy the thrill of the subject matter or they find it interesting themselves. According to two authors these movies can have both positive and negative effects on those who frequently enjoy them . According to Stephen King’s essay, â€Å"Why We Crave Horror Movies† those who seek out scary movies are simply doing so to gain a release from the real world. In opposition, Bernie DeGroat author of the essay â€Å"Scary Movies Can HaveRead MoreEssay Why We Crave Horror Movies by Stephen King940 Words   |  4 Pages Stephen King wrote a very brief essay titled Why we Crave Horror Movies, in which he explained some of the reasons that people choose to go to horror movies to be entertained. In his essay, King goes on to explain that we as a people need horror movies as a sort of release; to feed the darker elements within all of us without having to sacrifice our humanity (also, civility). King does this by comparing people based on their levels of sanity whereas some societal eccentricities are completelyRead MoreWhy We Crave Horror Movies By Stephen King Essay1080 Words   |  5 Pagesso is to warn ourselves of any potential danger we might be in and prevent any future harm done to us. (Dayton) So, for what reason might we humans want to experience fear; such as watching horror movies, when it is so closely associated with pain? In Stephen King’s somewhat subjective essay in the 1984 Playboy magazine, Why We Crave Horror Movies, King describes his reasoning behind why so many people are fond of watching movies residing in the horror genre. The content of his essay, though insertedRead MoreStephen King Why We Crave Horror Movies Analysis823 Words   |  4 Pagesdespise horror movies and dread waking up in the middle of the night due to daunting nightmares controlling their sleep. But somewhere in transitioning from a child to a young adult, many begin to acquire a love for horror movies. In â€Å"Why We Crave Horror Movies†, Stephen King proposes the idea that watching such gruesome violence keeps our inner demons in check while providing a â€Å"psychic relief† (2). Kings’ claim that watching violence prevents violence is simply false; in reality, horror movies desensitize

Scarlet Letter 4 = Essay Example For Students

Scarlet Letter 4 = Essay In the Scarlet Letter by Nathaniel Hawthorne, Pearl serves as the apple of Eden;. She is plucked from the hands of God in heaven and sent to the mortal world as a baby to make out its the scarlet letters hidden import; (155), causing Prynne and Dimmesdale to face their consequences. Pearl functions in the story on three levels: as a real child, as a continuing symbol of Prynne and Dimmesdales adultery, and as an allegorical figure sent to torment the sinners and direct their actions. Only Dimmesdale can ripen; her into the woman she needs to become. Otherwise she will continually serve as a representation of their mistake. Pearl is the rose bush that is located outside of the prison door. Although, she brings happiness to Prynne, Pearl is covered with thorns;. When Mr. Wilson asks Pearl the question of who made her, Pearl responds that she had not been made at all, but had been plucked by her mother off the bush of wild roses, that grew by the prison-door; (95). She is a good child, an infant;#8230;worthy to have been brought forth in Eden; worthy to have been left there, to be the plaything of the angels; (75), but she is a born outcast of the infantile world;#8230;an imp of evil, emblem and product of sin; (79). Her physical features did not show she is different: she has perfect arms and legs and has a native grace with innocent beauty. She is magnificent when she is displayed in her exquisite robes as her natural beauty shown through such that there was a circle of radiance around her. However, emotionally something is wrong with Pearl. If other children gather around her, she would feel the dislik e from the other children, and would snatch up stones to throw at them, while screaming. In the garden; of the Puritan society, Pearl is the rose bush, while the ugliest weeds of the garden were their Puritans children, whom Pearl smote down and uprooted, most unmercifully; (80). Prynne, the adulterous mother, feels the guilt of bringing Pearl into the world and is reluctant to discipline the child, because Pearl is Prynnes sole treasure, whom she had bought so dear, and who was all her world; (78). Pearl also represents the living embodiment of the scarlet letter embroidered on Prynnes clothing. She was the scarlet letter in another form; the scarlet letter endowed with life!; (86). All this enmity and passion had Pearl inherited, by inalienable right, out of Prynnes heart; (80). Prynne transmitted the rays of life through her impassioned state to Pearl, and, however white and clear originally, they rays of life had taken the deep stains of crimson and gold, the fiery lustre, the black shadow, and the untempered light; (77). She is beautiful, just as the embroidered letter is, yet she brings her mother much pain. Prynne is the woman of the scarlet letter; and Pearl is the likeness of the scarlet letter running along by her side; (87) and within Pearls personality are the mixed emotions that are contained within the letter;#8212;defiance, gloom, shame, and anger. She is as uncontrollable as the situation that the letter represents. Pearl serves as a constant reminder of the adul tery Prynne has committed. Even in her crib Pearl seemed fascinated with the scarlet letter. She is intrigued by the letter as she grasped at it, smiling, not doubtfully, but with a decided gleam that gave her face the look of a much older child; (81). Weeks would sometimes elapse in which Pearl would not look at the scarlet letter, but then it Pearls gaze would come at unawares, like the stroke of sudden death, and always with that peculiar smile, and odd expression of the eyes; (82). One afternoon she even hits the spot with wildflowers while Prynne endures the emotional pain. And when Prynne throws the scarlet letter away temporarily and then asks Pearl to bring it back to her, Pearl responds, Come thou and take it up!; (185). After Prynne picks it up, Pearl spontaneously kisses her mother, then the scarlet letter herself, and act which pains Prynne greatly. Since she is the symbolic embodiment of the scarlet letter, neither she nor it can be tossed away. On the allegorical level , Pearl functions here as an agent of the divine, preventing Prynne from avoiding the consequences of her actions. Even when playing, Pearl takes some eel-grass, and imitated, as best she could, on her bosom, the decoration with which she was so familiar on her mothers. A letter,the letter A,but freshly green instead of scarlet; (155). Pearl serves as a constant reminder and will not let Prynne forget why she is wearing the letter. Then, when Pearl is playing in the patches of sunlight that the shifting clouds have caused in the forest, she says to Prynne, Mother, the sunshine does not love you. It runs away and hides itself, because it is afraid of something on your bosom. I am but a child. It will not flee from me; for I wear nothing on my bosom yet; (161). Symbolically again, Pearl is reminding Prynne of her sin. Finally, Pearls mission in life ends when Dimmesdale announces to the entire community that he is also a sinner and opens his robe to reveal something on his breast. He asks Pearl for a kiss and she responds with a kiss and tears and the spell is broken. In the future Pearl will become a secure young woman, no longer a source of anguish to her mother. Pearl, whose very existence is the result of a broken Commandment, is able to kiss her father and no longer needed as the allegorical tormentor of Prynne. .uc080293ebccd12a80f5fcbf138ca5c3b , .uc080293ebccd12a80f5fcbf138ca5c3b .postImageUrl , .uc080293ebccd12a80f5fcbf138ca5c3b .centered-text-area { min-height: 80px; position: relative; } .uc080293ebccd12a80f5fcbf138ca5c3b , .uc080293ebccd12a80f5fcbf138ca5c3b:hover , .uc080293ebccd12a80f5fcbf138ca5c3b:visited , .uc080293ebccd12a80f5fcbf138ca5c3b:active { border:0!important; } .uc080293ebccd12a80f5fcbf138ca5c3b .clearfix:after { content: ""; display: table; clear: both; } .uc080293ebccd12a80f5fcbf138ca5c3b { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .uc080293ebccd12a80f5fcbf138ca5c3b:active , .uc080293ebccd12a80f5fcbf138ca5c3b:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .uc080293ebccd12a80f5fcbf138ca5c3b .centered-text-area { width: 100%; position: relative ; } .uc080293ebccd12a80f5fcbf138ca5c3b .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .uc080293ebccd12a80f5fcbf138ca5c3b .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .uc080293ebccd12a80f5fcbf138ca5c3b .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .uc080293ebccd12a80f5fcbf138ca5c3b:hover .ctaButton { background-color: #34495E!important; } .uc080293ebccd12a80f5fcbf138ca5c3b .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .uc080293ebccd12a80f5fcbf138ca5c3b .uc080293ebccd12a80f5fcbf138ca5c3b-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .uc080293ebccd12a80f5fcbf138ca5c3b:after { content: ""; display: block; clear: both; } READ: Tell Tale Heart analysis EssayPearl functions as another scarlet letter throughout the book. She torments Prynne and Dimmesdale, continually reminding them of their sin for plucking her off of the tree. She is beautiful yet she is covered with thorns that cannot be removed until Dimmesdale confesses. She is the sweet moral blossom, that may be found along the track, or relieve the darkening close of a tale of human frailty and sorrow;. You can complain that roses have thorns or you can rejoice that thorns have