What is a neutral property market?

The Neutral stock market is an investment strategy that is used by many hedge funds to provide revenues that are independent of the movement of the stock market as a whole. This strategy involves using long and short positions on stocks to reduce the amount of dependence on the whole market. The use of stock market neutral strategies requires detailed knowledge of the stock market industry, security strategies and risk levels. In most cases, the fund does not expand investments in several industries. The Hedge Fund has several long positions and some short positions in the same sector. In this way, the securing fund hopes that the portfolio will not negatively affect the circumstances that affect the industry as a whole. We hope that long positions will work better than the rest of the sector.

The neutral stock market strategy is also used to secure for investors in the fund. Investors of securing funds usually have to invest a large amount of capital to engage in the fund. MeltA large investment requires Hedge fund administrators to build some protection for portfolio as a whole. Hedge fund administrators, based on positions in both directions on the market, hope that they can reduce the amount of overall risk for investors. If the industry goes up or down, the money in the fund should remain intact.

Using a neutral strategy on the stock market includes a large amount of risk. Although the purpose of this investment is to create securing against market factors, there is still some room for errors. The success of this strategy depends on the ability of the Hedge fund manager to choose the right stock. Hedge fund manager must choose shares that will play Better than the rest of the sector.

If the Hedge fund manager chooses incorrect shares for the fund, it could have devastating effects on the portfolio. Any strategy that uses such active management techniques is by its very nature more risky than passive management strategy. Investors to this type of strategy must have cHuť at risk and believe in Hedge fund manager.