The addition of alternative
investments such as hedge funds to your portfolio should be based on long-term
portfolio objectives and tolerance for risk. For affluent investors, hedge funds
may be used to enhance returns and/or diversification.When choosing, be aware that "hedge fund" is a generic term and
that hedge fund investment offerings are diverse and cover the entire
risk/return spectrum. Some common risk factors to consider include, but are not
limited to, limited liability, lack of transparency, leverage, complex tax
considerations, potential loss of capital and potential lack of
diversification. Steve Ashworth, Wachovia, Winston-Salem, N.C.
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