StudentShare solutions
Triangle menu

Easuring Investment Performance. International Investments. Hedge Funds and the Madoff Scandal - Essay Example


Extract of sample
Easuring Investment Performance. International Investments. Hedge Funds and the Madoff Scandal

Measuring Investment Performance – the traditional view that a portfolio manager is to be measured over an entire market cycle is because most people leave their funds to be managed and do not worry too much about market fluctuations. These ordinary investors expect that their monies placed with portfolio managers will grow over time despite the ups and downs of market movements or gyrations. In short, these people expect their capital will grow accordingly and are in safe hands because they believe they had hired the portfolio managers precisely for this type of risk management. They think the cyclical nature of markets will protect their investments no matter what happens, because they believe markets will eventually recover in the long run. This type of thinking or mentality does not take into account the existence of other investing methods such as short-selling, leveraging (buying stock on margins), hedge fund investing and other kinds of esoteric investment instruments such as puts, call, options or other derivative instruments that can typically yield them higher returns without necessarily increasing the investment risks. Their kind of investing mentality is the “buy-and-hold” strategy; hold a particular stock for an enough period of time and the returns (dividends and stock price appreciation) will come naturally. This “plain vanilla” type of investing strategy measures a portfolio manager in terms of performance based on his stock selection (which equities he had bought, how big

Check these samples - they also fit your topic

Hedge Funds and Their Role in 2008 Financial Crisis
Name Surname Supervisor Subject Date Hedge Funds and Their Role in 2008 Financial Crisis Hedge funds are private investment funds that trade in stock market and formulate many strategies to earn absolute profits regardless of whether the market moves up or down.
3 pages (750 words) Essay
Hedge Funds
Hedge fund offers diversified investment opportunity to the investors. The hedge fund managers collect the money from the public and invest in diversified constituent of a hedge fund. The investors have the flexibility to withdraw their money at any point of time (Lo 40).
4 pages (1000 words) Essay
Hedge funds
It also addresses the issue on hedge funds as optimal investment strategies. Hedge fund, as reported by the President's on Working Group on Financial Markets (1999), is defined usually as a variety of different kinds of investment vehicles which have some features in common.
5 pages (1250 words) Essay
Hedge Funds-who is the winner(literature review)
The first part tells about how this came to be and applied by the man who first investigated technical methods of market analysis for an article titled Fashions in Forecasting, and in a few months became a
14 pages (3500 words) Essay
International Finance and Investments
The United States, the United Kingdom, and a few other countries including Hong Kong SAR, Singapore, and Australia demonstrated resiliency by showing increases in FDI numbers. Australia, a developed country and a responsive government, has been chosen in this study
10 pages (2500 words) Essay
UK islamic funds performance
Islamic Sharia does not permit the interest therefore the traditional banking and financial system may be considered as in the direct conflict with the laws of Islamic Sharia. Thus an alternative system of finance based on Islamic
5 pages (1250 words) Essay
International Investments
The Indian stock market has been in existence for 135 years, and I believe it has stayed in the industry for so long because of the trust and confidence of investors.
2 pages (500 words) Essay
International Investments SLP
Trading in ETFs is at some degree different to trading in a particular stock and even to mutual funds. An ETF is like an umbrella that scopes a group of stocks in specific investing theme, as opposed to a mutual fund that is merely some group of
2 pages (500 words) Essay
Investment Management: Matual Funds, Hedge Funds, and Other Funds
In effect a weighted average of sub period internal rates of return between cash flows is generated. But this method has a drawback of having to capture all the data at the point of each cash flow and in
2 pages (500 words) Essay
The Growth of hedge funds: The reasons for a sustained progress and its effects on the UK investments market
, the hedge funds have diversified their investment portfolios, and they engage in a wide variety of the investment strategies and have added other financial instruments. They aim at achieving positive investment returns with the use of classes of assets such as the bonds and
10 pages (2500 words) Essay
is the firm, the dividend history of the company, etc.) and how well he allocated the funds accordingly based on asset-type allocations (Lawton and Jankowski, 2009, p. 731). This type of an investment strategy mirrors the performance of the economy and if the economy recovers, then the portfolio's worth should recover accordingly too. However, hedge funds adopt a different investing style and this style contradicts the conventional wisdom of the traditional investing strategy mentioned above. For one, hedge funds, if managed exceedingly well, can outperform the markets in either up or down conditions. These funds seem to defy the market dynamics by giving a decent return in all market situations; a well-managed hedge fund is that by billionaire George Soros. (360 words) Diversified International Investments – this is perhaps one of the most persistent myths in the investing and financial services industry today. With a number of esoteric and derivative instruments available today for the sophisticated investor, the belief is that holding a diversified portfolio insulates the investments from financial risks. However, recent market developments in a way had nullified this myth, with some investors losing out in a spectacular way because they made the wrong decisions. In short, these investors who tried diversification failed because of the extreme complexity in today's markets with a good number of extraneous factors which cannot be foreseen altogether, no matter how good the investment management is. Several factors which are often unpredictable to a certain extent are currency exchange rate fluctuations, political risks of a country, price of oil, prices of commodities and futures markets. There are many instances in which even the most sophisticated investing techniques have floundered like LTCM. A good example here would be


Finance and Accounting Name of Student (author) Student ID Number: Name of School (University) Word Count: 1,173 August 21, 2011 Finance and Accounting Introduction The global financial market is in great turmoil today, as shown by the wild swings in the major stock markets during the past few days and weeks…
Author : conroyalysa
Easuring Investment Performance. International Investments. Hedge Funds and the Madoff Scandal essay example
Read Text Preview
Comments (0)
Click to create a comment
Let us find you another Essay on topic Easuring Investment Performance. International Investments. Hedge Funds and the Madoff Scandal for FREE!
Contact us:
Contact Us Now
  • About StudentShare

  • Testimonials

  • FAQ

  • Blog

  • Free Essays
  • New Essays
  • Essays

  • The Newest Essay Topics
Join us:
Contact Us