1. Investment Funds
Day 718, 16:44
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Published in Australia 
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by
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by The Old Oak
1. Investment Funds
i- investment funds
ii- mutual funds
iii- hedge funds
iv- funds of funds
i- investments funds
An investment fund is an organisation that invests money on the currency market. To get one of these running you will need an organisation (sort of obvious), trading knowledge, starting capital and respectability. The first three, you can get through trading reward money.
The respectability is a lot harder to get. Posting articles about trading, following and analysing currencies and sharing that knowledge help. A great way to start out is by getting some of your friends to invest and posting your performances regularly, which goes to show you are reliable, and a decent trader.
Of course, any investment should be covered by a contract.
ii- mutual funds
So you want to run your own investment fund but don't know which one to pick.
The first type of fund is the mutual fund, where the investor is rewarded on a fixed basis. For instance, if one puts 10g into your mutual fund, you'd promise 0.05g per week (5
Sooo, to run a mutual fund, you will need a large seed capital, a profit reinvestment scheme and strict liquidity requirements. A large seed capital, 20 to 30% of the capital reassures investors by proving you can afford to make a loss when markets are volatile, and that they will get their money. A profit reinvestment scheme ensures profits grow exponentially. Finally, the liquidity requirements ensure you can always pay investors off.
iii- hedge funds
A hedge fund is a similar thing to a mutual fund except customers accept more to take more risk. A hedge fund manager (that's you) will promise part of the profits on the managed fund. For instance, 80% return for customers on their investment. The cool thing is that if you have a bad week, you don't have to dig into your pockets. However, to attract investors, you'll need to keep up a good performance, manage volatility, and inform you customers regularly.
In short, you don't need to be cautious, low liquidity requirements, no fixed rates, but you've got to be able to deliver.
iv- funds of funds
A fund of fund is a fund that primarily invests in mutual funds or hedge funds. Either way, the key is diversification. While with currencies, one can take a few short term risky positions, trusting your guts, when investing in someone else's business, you can only rely on numbers. Invest in a large base of strong reliable funds and maybe some risky ones.
So what are the pros and cons of this? The pro are that you don't have to worry about the day to day stuff, you can still invest on the MM, you get to conduct interviews with fund managers. The cons, you have to read loads of weekly reports, you have to conduct interviews with managers, you depend on someone else.
Table of contents
Back to chapter eight
i- investment funds
ii- mutual funds
iii- hedge funds
iv- funds of funds
i- investments funds
An investment fund is an organisation that invests money on the currency market. To get one of these running you will need an organisation (sort of obvious), trading knowledge, starting capital and respectability. The first three, you can get through trading reward money.
The respectability is a lot harder to get. Posting articles about trading, following and analysing currencies and sharing that knowledge help. A great way to start out is by getting some of your friends to invest and posting your performances regularly, which goes to show you are reliable, and a decent trader.
Of course, any investment should be covered by a contract.
ii- mutual funds
So you want to run your own investment fund but don't know which one to pick.
The first type of fund is the mutual fund, where the investor is rewarded on a fixed basis. For instance, if one puts 10g into your mutual fund, you'd promise 0.05g per week (5
😵. What's great about this kind of management is that you'll end up paying less to your customers, and you don't have to reveal your strategies. Also, it's a low risk investment for your customers, and therefore attractive. On the dark side (hehe), if you screw up, the money's coming out of your pocket.
Sooo, to run a mutual fund, you will need a large seed capital, a profit reinvestment scheme and strict liquidity requirements. A large seed capital, 20 to 30% of the capital reassures investors by proving you can afford to make a loss when markets are volatile, and that they will get their money. A profit reinvestment scheme ensures profits grow exponentially. Finally, the liquidity requirements ensure you can always pay investors off.
iii- hedge funds
A hedge fund is a similar thing to a mutual fund except customers accept more to take more risk. A hedge fund manager (that's you) will promise part of the profits on the managed fund. For instance, 80% return for customers on their investment. The cool thing is that if you have a bad week, you don't have to dig into your pockets. However, to attract investors, you'll need to keep up a good performance, manage volatility, and inform you customers regularly.
In short, you don't need to be cautious, low liquidity requirements, no fixed rates, but you've got to be able to deliver.
iv- funds of funds
A fund of fund is a fund that primarily invests in mutual funds or hedge funds. Either way, the key is diversification. While with currencies, one can take a few short term risky positions, trusting your guts, when investing in someone else's business, you can only rely on numbers. Invest in a large base of strong reliable funds and maybe some risky ones.
So what are the pros and cons of this? The pro are that you don't have to worry about the day to day stuff, you can still invest on the MM, you get to conduct interviews with fund managers. The cons, you have to read loads of weekly reports, you have to conduct interviews with managers, you depend on someone else.
Table of contents
Back to chapter eight
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Comments
good article. voted
[nods] Truly. A question - can erep handle market defining money transactions? (Not the correct term, but can't remember what is). As an example - the Swiss economy is currently in tatters due to their being too much Swiss currency on the market: is it practical for large funds, govts etc to buy up the currency, fixing their economy - and then slowly reselling at a profit as the swiss economy requires it? Or is the timespan too great to allow this to be profitable?
What is profitable is arguable 😉
In any case, if you have VERY deep pockets, you can control a currency. Even with 50g you can move a weak currency two or more points down.
For a foreign power to control so much CHF would be suicide because it's so illiquid. It is only worth it if you can spare the capital and believe the economy is going to pick up.
Waiting for next section 🙂.
Great job!