Living on the
In the current desert-like environment of poor returns, hedge funds are gaining notoriety. Hedge fund products, which hedge against risk by holding opposite-direction securities, instruments or futures, have a reputation for performing well in down markets.
Problem is, they're also risky. "The hedge fund area has been the Wild West of finance," says Christopher Geczy, assistant professor of finance at the University of Pennsylvania's Wharton School. Worse yet, because not all products in hedge fund portfolios are traded on an exchange, the risks are hard to gauge, which is one reason hedge funds require their investors to meet hefty net worth requirements.
How do you join the hedge fund fray without getting burned? "You have to be willing to take a flier," says Geczy, who warns that unlike mutual funds, hedge fund performance can't be researched online. Still, investors can minimize risk by doing some legwork. Says Geczy, "Look at the backgrounds of [those] who developed the investment strategy, the fees and incentives, the volatility-and what kind of underlying securities they are trading in."
Looking for a low-cost way to attract top recruits, improve retention or boost em-ployee morale in the wake of a layoff? Then try helping your employees buy a house.
"Employer-assisted housing programs give employees both a psychological and a financial boost," says Beth Marcus, a director in the national community-lending center at Fannie Mae who reports that a growing number of firms are finding such programs an effective and inexpensive way to win talent and build loyalty.
While programs typically involve providing a forgivable loan that vests over five years, with 20 percent of the principal forgiven each year, they can be tailored to fit virtually any size company. "It can be an interest-free but repayable loan or a matched savings grant [where employees save toward a down payment and the employer matches it up to a certain limit]," says Marcus. "Even a very small employer can offer a home buyer education seminar or a day off for closing."
Jennifer Pellet is a New York City-based freelance writer specializing in business and finance.