164: A Listener Question & How to Join the VIP Experience?

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Learn whether to invest in hedge funds, what returns are possible and about the Be Wealthy & Smart VIP Experience!

Here is our listener question for the day:

Hi Linda,

I hope you don’t mind my sending you this e-mail about your podcast 090. I have listened to roughly 35 of your podcasts now and find them to be very informative. I especially liked 090 “why not to invest in 5-star rated mutual funds”. It was a real eye opening segment that was constructed in a way that resonated with me. The “if, then” references were right on point. I am trying to build a personal knowledge database/decision matrix about investing and you are the starting point for me. My wife and I have 3 pensions/401K’s between us as well as stock investments with large brokerage firms. Frankly we are tired of the roller coaster of performance fluctuation.

Is it unrealistic to believe that we can do better than 5-8% annual return on our investments? I have a friend who runs a hedge fund that I could get into. Is this a good investment? What questions should I ask about the fund? Would the Hedge Fund topic be a good podcast topic for you to discuss?

I think what you are offering is great. I am not sure which of your pay services/products may be right for us yet but we are still evaluating and when we understand more will make some decisions. Based on your recommendations I have purchased “How to make money in stocks” and Investor’s Business Daily, also the “Biology of belief”. It is all great reference material. I am absolutely committed to mastering the skill sets needed to become proficient at investing. If you have a syllabus that best defines how to get there, other than what I am doing that would be great.

Thank you for what you are doing for others.

Ron

Linda’s response:

Hi Ron,

Thank you for your email!

I’m glad you’re investing in your education by reading books I’ve recommended and that you are starting with step #1 of the 6 steps to wealth: create a wealthy mindset.

Hedge funds are for accredited investors with $300k of income or $1 mill net worth excluding their home. It can be lucrative if they have a good process and track record. You’re going to want to ask what those are and how much leverage they use. It’s not uncommon for hedge funds to use 300% leverage. The high point to low point in a hedge fund is called the “drawdown”, that’s the volatility of the fund. Because it’s leveraged the volatility can be high, but most hedge funds try to minimize volatility while providing returns above the market indexes, aka “alpha”.

A hedge fund is for a sophisticated investor who can afford to lose their money. It is not a basic investment to start out with.

If you’re looking for where to start investing, I’d suggest you listen to my asset allocation podcast.

If you’re looking for education and guidance from me where to invest, there’s the Be Wealthy & Smart VIP Experience. It’s where I work with the members and provide live webinars with them monthly, source the most pertinent financial articles that show trends in the market and suggest exactly where to invest.

Understanding that money moves in cycles and peaks in bubbles led me to make $2 million in my brokerage account while other people completely missed the opportunity because it wasn’t the traditional way.

Sometimes opportunity stares you in the face, but unless you take advantage of it, it will pass you by.

Today there are new cycles emerging, but you have to know where to look. I’ve never been more exciting about the wealth building opportunities I see today.

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