Investor's Passport to Hedge Fund Profits: Unique Investment Strategies for Today's Global Capital Markets

CHAPTER 3

The Tools in Your Equity Toolbox

Although other types of investments are generally more limited in scope, that is by no means the case with international equities, and so we wanted to spend just a little time focusing on some of the key particulars of the tools by which you can do your equity investing as a globally minded personal portfolio manager. Our look at these tools includes an examination of them based on both specific investment type (mutual fund, stock, ETF, etc.) as well as the platforms from which you trade and manage your assets (U.S.-based and foreign brokerages). In the end, the decisions you make with regard to asset selection are personal; by definition, a hedge fund can basically do what it wants, and thus so can you. For that matter, the strategies you decide to employ, as well as the instruments you choose to utilize, may vary widely. That said, the key feature of a hedge fund that you always want to maintain, without regard to management style, is the constant attempt to maximize returns and limit losses in any given market climate through some combination of strategies and instruments; to that end, your equity positions, whether long or short, will likely serve as a linchpin in that effort. It is, therefore, important to understand the key benefits and limitations of the global equity instruments available, as well as the benefits and limitations of the available custodial brokerage opportunities through which you may elect to execute your transactions. ...