Monday, July 7, 2008

The New Generation of Funds

Investors are starting to understand and be comfortable with alternative investment funds, and a new type is called "130/30". The 130/30 funds are essentially, where the fund is invested 30% in short positions (sold a stock that is not owned), and the original fund's cash plus cash proceeds from the short sells are then used to buy 130% in long positions. This can be extremely effective if a fund manager believes that one asset class is falling (goes short) while others are climbing (goes long).

The benefit of this type of fund is that the fund holds both types of positions, so even if a bad day on the market occurs, if the short asset class went down, the fund's overall losses are lessened. There are several variations of the funds that different fund managers and fund families use, and not all of them are the same or even invest in the same asset classes.

While these are not a "magic fund" that always has the best returns, they are a good alternative investment to add to the portfolio. We have frequently used many of these types of funds, and we continue to analyze and use the best funds available.

2 comments:

Nita said...

Nice blog! I was just wondering because I saw your Feedflare here. How did you manage to do that? I've been trying to do it on my XML blogger blog but to no avail. Any tips or ideas? Thanks in advance!

Cheers,
http://www.nitascorner.info
http://boholparadise.blogspot.com
http://www.nitasrandomthoughts.info

Rollins Financial Counseling, Inc. said...

Nita...

Thanks for your comment and your question. It looks to me like you have figured it out, but it was definitely not as easy as the Feedburner website described it.

Looking at your blog (nice photos), I see the FeedFlare links seem to be working correctly. I will say that when you make a change to the services you use, it will take a few hours or so for the new services to show up, or the deleted ones to disappear.

Hope you continue to read our blog.

Thanks,
Rollins Financial Counseling, Inc.