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What is A Hedge Fund? (Investing 101) - YouTube
Channel: ClayTrader
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what is a hedge fund let's talk some
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stock market
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101 information here and when you're new
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and just getting started
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i'm sure you've heard of hedge fund
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whether that be on the news or maybe on
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social media or in an article
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and you're wondering okay yeah i get it
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hedge funds are associated with wall
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street
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but you know what actually is a hedge
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fund how does it work and
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full disclosure here to honor your time
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if you're looking for some sort of like
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in-depth nitty-gritty every little nook
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and cranny detail about a hedge fund
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i'm not going to do that here this is
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just a 101 topic so i want to talk about
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it from a broad sense
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so that way you have a better
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understanding of you know what they are
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how they work
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when the next time you hear them or you
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know if you're in a conversation or
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whatever so really
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this is what a hedge fund comes down to
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a hedge fund
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is based on what i'm gonna call
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the dude right this dude is a baller
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this guy i mean people look at him
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they're like oh yeah
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all right i think in this day and age
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lingo would be bro bro i don't even know
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but
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he is the dude right he is everybody
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looks at him now why do they look at him
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well they look at him for really a
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couple different reasons maybe he's
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making a bunch of money
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maybe he's smooth what do i mean by
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smooth maybe he's just a really good
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smooth talker he knows how to smooth
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he knows how to i mean he's just do you
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know anybody like that that's just
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oh so smooth in their chat and they
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could they could probably sell
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oceanfront property somebody that lives
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in iowa right that's how smooth they are
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but the point of being is he is the dude
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for these reasons right here and then
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namely though the traditional one is
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just going to be
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he's making money he seems to be making
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money he seems to be doing very well
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in that regard well what regard well his
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money is coming from
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some sort of financial market to keep
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things simple let's just call the stock
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market
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he seems to be making all sorts of money
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from the stock market which
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is going to cause this to happen you're
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going to have all these other people
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out here and these people you know
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they have jobs they're running companies
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they're doing a variety of other things
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but because this guy
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the dude is making so much money they're
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all like wow
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hey you're doing you're doing very well
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i don't have time i don't have the
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desire i don't have the passion i don't
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have fill in the blank
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to get involved and be you know track
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the stock market like you are
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but you know what hey can we do this
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can we
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throw you some money can you take our
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money and grow it
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like you've been growing yours or you
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know other clients or whatever but if a
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hedge fund that's just getting started
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it would be something like this
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but the point of being is even if the
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hedge fund is already done if the hedge
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fund is showing really good returns
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i mean that dude is just gonna become
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that much more of the dude and you're
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gonna have that many more people that
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want it but
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at the core you're just having a lot of
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other people
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that like i said don't have the time
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don't have the desire don't have the
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knowledge
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i mean they are these are going to be
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higher net worth individuals uh but
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they're going to be taking money
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and they're going to be giving it to
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this guy so this guy is going to say
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well of course
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i will take that money and this right
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here
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becomes the hedge fund
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the hedge fund is a collection of other
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people's
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money and it is a person or it's a a
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small group of people
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that are managing that money and trying
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to get it to grow
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and then the kicker being okay well
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these people
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because they're not really doing
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anything yet if the hedge fund's any
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good they're still gonna be making money
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well of course the hedge fund itself
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they're gonna be making money along the
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way too
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and the way the hedge fund makes money
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is some sort of usually
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management fee hey if you have
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uh you know a certain amount of assets
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with us then we're gonna charge you
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and i'm just totally making this number
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up one percent a half a percent
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two percent and i mean if the hedge fund
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has billions and billions of dollars
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like i said just from a management fee
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perspective alone that's why hedge fund
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managers
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they got a lot of that chedda okay they
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got all sorts of it
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just from the management fee alone
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because again if you have a billion
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dollars i'm not a mathematical genius
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but some in the comments let me know if
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you have a billion dollars and you
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charge a one percent management fee
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what is that is that a million or is
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that 10 million nate
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i don't know you let me know down in the
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comment section it's a lot of money
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oh 10 million there you go so 10 million
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at just one billion like i said a lot of
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these hedge funds are
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in the multiple billions but you could
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make money as a fee
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or then you can also make money as a
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percentage meaning hey you know what
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we i'm making the numbers up we grew
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your money
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by ten percent you owe us three percent
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yours two percent
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so then they also have the upside
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potential too
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i mean think about it that's that's
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where hedge funds uh and people can get
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mad at them
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because hey you know what from the fee
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perspective if they're losing you money
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sorry you still owe us for our time to
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go and lose your money
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and it is what it is but hey like is
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that hedge funds they got a good thing
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going there
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but also percentage so think about that
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even if they lose money
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hey they're still making that management
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fee but if they make money then they're
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going to be taking a percentage
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but you know taking a percentage if
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they're doing their job right i mean
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these people over there aren't going to
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man
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they're they're not going to care
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they're not going to care about the fee
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they're not going to care about the
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percentage
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because these people are seeing their
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money grow
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when they're not doing anything other
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than just handing their money over to
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the hedge fund itself
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and that is how it works at the core is
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a hedge fund it's just collection of
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other people's money
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and the hedge fund is making money by
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management fees and percentages and like
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i said maybe there's some other little
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angles they take to it to you know make
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that extra money
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but that is how it ultimately works and
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do hedge funds only exist on wall street
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no
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it can exist anywhere but that's just
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kind of synonymous when with another
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wall street and hedge funds uh but it's
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just a big large
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pool of money from a bunch of different
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individual investors
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and then the dude or the small group of
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dudes goes out there
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and makes different situations now the
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word hedge comes from
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they're always looking to potentially
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maybe put on short side positions and
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they're trying to hedge risk
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so by hedging risk they're saying okay
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well if this thing happens that's bad it
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won't hurt us
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as bad because we have this hedge in
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place and that hedge so that's where the
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name comes from but
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at the end of the day it just means a
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collection of money
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from high net worth individuals and then
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they're trying to grow it
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and they get a fee and a percentage to
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do so so hope this helps if you have any
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other type of 101 questions you know
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what is uh
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fill in the blank please leave those
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down in the comment section below this
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is always a good
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idea generator for me doing these 101
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topics and i'll try my best to get to
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those videos so i would love to hear any
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suggestions you have or any other
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questions
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about hedge funds leave those down below
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and i'll do my best to answer them
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so if you like these videos if you like
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hopefully like what you see enough to
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hit that subscribe button but yeah
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now you officially know what a hedge
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fund is first off thanks so much for
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watching the entire video real quick
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before you go
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i want to invite you to a live webinar
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web class training workshop online event
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whatever you want to call it but it will
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be me live
[425]
revealing to you what i discovered that
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has allowed me to transform myself from
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being an
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employee to being my own boss including
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how i had only one losing day out of 73
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days in total
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i'm going to cover three keys that have
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helped me unlock
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profitable consistency within the
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markets the first key is super weird
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but in a productive type of way the
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second key is super awesome because it
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quite literally is wired into our dna as
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humans
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making it very easy to use but in a
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cruel way
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this becomes a pitfall for many traders
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i'll explain it all though
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including how to avoid the pitfall that
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it creates for some
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and yeah the third key when you hear it
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sounds way too good
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way too good to be true but it's not and
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i'll show you how it all works
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then at the end i open it up for a
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question and answer session that is
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again
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totally live even if you can't make the
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live session please still sign up as it
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will be recorded
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and you can go back and watch the replay
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that i will send you
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click the image on the screen or click
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the link down in the description box
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so you can get the date and time and
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claim your spot which i should note is
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limited due to the fact that this truly
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is a live event
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if you have any questions let me know if
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not i'll be seeing you soon
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