Scott Tominaga Sheds Light On the Diverse Effective Hedge Fund Strategies

Hedge Fund Strategies

All investors search for the most effective ways possible to grow their money. There has been a great increase witnessed in the popularity of hedge funds in the financial portfolios of people across the planet in the recent years.  Scott Tominaga marks the fact that hedge funds enable people to enjoy great profits in less time, while having minimal risks involved in it. This is one of the key advantageous characteristics of hedge funds.

Scott Tominaga discusses the most important Hedge Fund Strategies

Hedge funds are an exceedingly popular type of an investment partnership. The term “hedge” basically has been derived from the distinguished types of trading techniques used by hedge fund managers to grow money through this investment vehicle.  Scott Tominaga marks that these fund managers usually “hedge” themselves by going long or by shorting stocks, with the aim of securing the maximum possible gains for the discerning investors. Mr. Tominaga has more than twenty-five years of involvement in the sphere of financial services, and hence is well-acquainted with the elements that come under hedge fund investments. He has a good idea about the hedging strategies popularly used to enable investors to enjoy high profits while reducing distinct investment risks.  Here are a few of those strategies:Hedge Fund Strategies

  • Long – Short Equity: This is among the most popular equity strategies followed by contemporary investors. In the scenario of a long/short portfolio, the distinguished investors typically get the opportunity to purchase stocks of a company that is anticipated to outperform. They also get to swiftly sell the stocks that are expected to underperform in the future. The risks involved in these portfolios are usually low as they have minimal dependence on the financial market. The defining characteristic of long/short portfolio is that they enable investors to enjoy absolute returns, irrespective of the prevailing market condition and performance.
  • Market Neutral: This investment technique is quite similar to the strategy involved in equity long-short funds. Similar to the distinguished long-short portfolio, the performance of the market natural funds are absolutely independent of the conditions prevalent in the financial market. A lot of these funds are designed to eliminate, or at least reducing the extent of market volatility. To provide maximized returns, market-neutral funds usually use a bit of leverage. They use distinct derivatives with the aim of hedging the portfolio of the investors.
  • Convertible Arbitrage: The process of investing in convertibles, and then shorting their underlying stocks, is one of the key hedge fund strategy used by many modern investors. In this investment vehicle, the investors are required to purchase the convertible debt of a company, and then go on to short-sell the stock of the same enterprise. The convertible debt can be considered to be a specialized type of a bond that can be easily converted to stock in the future with ease.

Scott Tominaga says that the above-mentioned strategies are commonly used by both institutional clients and high-net-worth individuals [HNIs] to enjoy high returns on their particular investments.