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Money Buzz 07/03

Joining the hedge fund fray; helping your employees become homeowners

This story appears in the July 2003 issue of Entrepreneur. Subscribe »

Living on the Hedge

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.

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