“The Hedge Fund For the Rest Of Us”
Don’t Wait Until You’re Rich To Start Investing Like The Rich
Could you explain what a hedge fund is and how it works?
A Hedge Fund is an investment partnership that is available to wealthy individuals with assets over $1 million and institutions such as pension funds, endowments, and charities (thus, millions of Americans indirectly invest in hedge funds without even realizing it). Originally hedge funds did what their name suggests, hedge against downward movements in the stock market by shorting stocks for clients. Now they have taken on a different form, investing in dozens of different markets including commodities, currencies, futures markets, and exotic instruments that have been created. Hedge Funds operate similarly to a mutual fund, but are not obligated to publicly disclose returns or trading details, and are not as well regulated as mutual funds.
What prompted the need for Hedgeable, and where do you hope to take it?
We started Hedgeable.com in response to the financial crisis. Everyday investors don’t have the resources of the wealthy, and got unnecessarily hurt during the crisis. What we do is provide sophisticated investing that is simple and easy to follow. By doing just a few trades during the crisis Americans’ IRAs and 401Ks could have ended with about 50% more in value. We hope to continue to provide services that are innovative and help in every facet of investing, whether its portfolio creation, portfolio management, or financial education.
What does Hedgeable offer that investors can’t just do on their own?
We have created new technology that allows us to advise users on about 1 simple ETF trade per month, tailored for their sophistication level, to cut the chance of losses in their portfolio and keep it growing. We have designed this process over many years and through thousands of hours of testing and research. We made much of the site free, including expert trade recommendations, portfolio analysis, and suggestions. Our Portfolio Management Platform is only $19.99/month after a 30 days free trial. So, we tell users that it’s really not worth it to try to replicate what we are doing; we have purposefully made the site accessible to those of all income and sophistication levels.
How do I get started?
All you have to do is enter your e-mail and create a password. After that we ask what you need help with- Portfolio Analysis (free), Portfolio Building (one time fee), or Portfolio Management (30 Days free, then a very small monthly fee thereafter). On our Portfolio Management Platform we don’t take any of our users’ money or access their account at all. If you have an account at a discount broker such as E*Trade you leave it there.
Should I sign up for one or all three of the Portfolio tools?
Our tools can be used in tandem or independently of one another, it is up to the user. We like to think of portfolio management as building blocks. First comes financial education, which can be found in our Knowledge Center. Next comes analysis of a current allocation (or a sample allocation for those who don’t have a portfolio), which can be found in our Portfolio Analyzer. Next is the building of a customized portfolio, which is found in our Portfolio Builder. Finally, is the proper management of the customized portfolio that has been built, as found in our Portfolio Manager.
And what trades does this allow investors to make? Can I buy mutual funds, precious metals and currencies through you?
We are not a broker, we only give advice on securities to buy or sell, so our users can’t directly purchase or sell anything through us. Anything they buy is at their discount broker of choice and is their ultimate decision. We only recommend ETFs, but our users can manage both S&P 500 stocks or ETFs on our Portfolio Manager Platform.
Are these portfolio tools the ones used by larger hedge funds?
We have designed everything on the site ourselves, nothing has been purchased or recycled. All of the concepts are based on our experience in helping to manage money for very sophisticated wealthy investors. We have simplified them and made them easy to use and useful for the everyday investor.
Would you recommend Hedgeable to beginning investors, or should they have some experience with the markets before using your service?
The service is designed for investors of all sophistication levels, and is actually geared towards those with little to no experience. There is no prior investment knowledge needed to use anything on the site. We have very good technology that allows us to customize everything on the site according to a user’s experience level. We recommend only the simplest of securities (i.e. a bond or stock ETF) and tailor everything to each client. We provide detailed tutorials and videos, and have definitions on top of every term, so any analysis is easy to follow. We also have dedicated customer support and a live chat feature embedded on the site that allows users to ask me any kind of investing question throughout the day.
Is this a good time to be launching a hedging start-up, considering consumer and investor sentiment following the financial crisis?
This is a perfect time for a service like ours. People are looking for answers. They have no idea what to do and where to turn. They were let down by the financial community over the last few years, with many that were nearing retirement wiped out. There is always a need for hedging, even when the market is riding high. What financial advisers never tell their clients is how devastating losses can be. For example, a 50% loss in a portfolio like what was seen in 2008, followed by a 50% gain like what was seen this year, still leaves you with a 25% loss. This is why losses are like quicksand, once you start sinking its almost impossible to dig out. Right now Americans are in quicksand, and there was no reason for it.
If you are interested in trying Hedgeable, Mike has given me a promo code which extends the one-month free trial to three months. Leave a comment below or RT this post on Twitter and I can give ten people a code.
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