Institutional investors, hedge funds, endowment money managers, and the rich had the resources and availability of a strategy of balancing bullish and bearish stock picks. The premise of this strategy is to pick stocks (long) money managers believe will increase in value while (shorting) betting against stocks money manager believe will have poor performance. This allows participation in a bull market while providing a degree of protection if the stock market decreases. These strategies are now available to the general public. Morningstar classifies this in the Market Neutral category. These funds provide the advantage of a low correlation to main stream assets such as stocks and bonds. However, market neutral funds are fairly complex products, may have high fees as well as turnover. Investors should consider these issues before investing.
You Might Also Like
This article is written by Kevin J. McNab. Kevin is President of ACE Wealth Partners, LLC and is a CFP®, ChFC®, and CRPC®. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by ACE Wealth Partners, LLC unless a client service agreement is in place. If you have any questions regarding this Blog Post, please Contact Us. Please read our website DISCLOSURE carefully for additional information.