Are hedge funds worth investing in?
According to a leading brokerage research firm ForexToStocks, Hedge funds involve the use of complex investment tactics to enhance profit margins. However, investors need to pay high fees and bear a higher level of risk as well. It is not worth investing in these funds since the investment securities available are the same as in a normal investment management company.
In this piece, we prove with logic that why one should prefer an investment management company such as forex92 over a hedge fund such as Melvin Capital.
Melvin Capital – an Overrated Hedge Fund
There is no doubt that Melvin Capital is an overrated hedge fund that relies on false promises of extremely high ROI and low risk. The returns in actual are far lower than the advertised claims.
One example of how Melvin Capital hedge funds fail is Game Stop. Melvin capital lost a massive sum of 2.75 billion U.S. dollars in Jan 2021 which is equal to 53% of its market worth. The hedge fund promises high-profit returns to its investors but the results are quite different.
Some Main Disadvantages of Melvin Capital
Melvin Capital has several disadvantages including but not limited to the following;
- High management fee
- Fake claims about high returns
- Difficult onboarding process
It is best to avoid this hedge fund and look for a regulated investment management company such as Forex92.
Forex92 – The Best Alternative for Melvin Capital
Forex 92 is undoubtedly the best alternative for Melvin Capital. It offers better returns and no high risks are involved. Forex 92 does not invest more than 3% of the total investment in a single trade. This makes it less risky as compared to Melvin Capital as funds security is usually a prime concern of investors.
Why Choose Forex92?
There are several reasons why investors should prefer Forex92 over Melvin Capital;
- Proven Trading Strategies
One of the main advantages that Forex92 has over Melvin Capital is its trading model. It uses
proven trading strategies and money management techniques to produce high returns. More importantly, the experts at Forex92 perform detailed technical and fundamental analysis before each trade.
- Easy onboarding process and quality customer support
Forex 92 has a very simple onboarding process. To participate in its managed account, the investor has to connect with one of the listed partner brokers, create an Mt4 account, deposit funds and then share credentials. People who are interested in copying trades have to follow the company’s trading account on Zulu Trade.
- Low risk trading
Unlike hedge funds, Forex92 does not execute high-risk trades and only a small ratio of the total capital is invested. The company opens one trade at a time and uses a risk reward ratio of at least 1:2 for optimized profits.
How Does Forex92 Work?
Melvin Capital has a complex onboarding process that most investors fail to grasp. However, this is not the case with Forex92 that follows a simple sign up process. Here are the steps.
- If you are interested in a managed account, then the minimum investment is $10,000. To start, you have to connect with one of the listed partner brokers. Investors who do not use the tracking link or use their own broker are charged 5% extra.
- Fund deposit is the next step. For the managed account, you can begin with $10,000 which is for a Personal Account. The Business Account and Enterprise Account have a minimum investment requirement of $50,000 and $ 100,000 respectively.
- The last step is providing Mt4 credentials to the trading team. Once you have submitted the user ID and password, this team would begin trading immediately.
Is Forex92 Regulated?
Forex92 is completely regulated. The partner brokers listed on the Forex92 website are authorized and regulated by FCA, CySec, and ASIC. This simply means that none of your investments would be lost if your broker files for bankruptcy.
Return on Investment: Forex92 Vs Melvin Capital
There is no doubt that Forex92 has a better return on investment than Melvin Capital which offers an average return of 21%. However, the minimum return that Forex92 offers on its “personal account” is 25%. This return percentage increases to 30 and 35% for “business account” and “enterprise account” respectively.
Drawdown & Risk: Forex92 Vs Melvin Capital
Melvin Capital is a hedge fund and promises high returns by taking high risks. Investors can lose all their money in one go. This is not the case with Forex92.
- Forex92 does not trade for more than 3% of the total capital for each trade. This tactic helps in protecting the capital investments.
- Forex92 uses manual trading methods and no high-risk scalping methods are used.
- Even when Forex92 does not invest in high-risk trades, the return rate is better than Melvin Capital.
Conclusion
Taking calculated risk is good but opting for unnecessary high-risk trades is not a wise thinking. Melvin Capital is a hedge fund with a high-risk percentage and if your fund manager does not work with a very smart strategy, all your finances can be lost in one go.
Comparatively, Forex92 is a better investment option with a lower risk factor. Only one trade is opened at a time for the investors. Secondly, the analysis is done manually without the use of bots. The minimum returns offered are 25% on a minimum investment of $10,000.
The onboarding process of Forex92 is simpler than what investors of Melvin Capital have to go through. They simply have to start by connecting with one of the listed partner brokers through the tracking link and deposit funds. Lastly, the mt4 account credentials are provided to the trading team to begin things.
Frequently Asked Questions (FAQs)
What are hedge funds?
Hedge Funds are high-risk investment options involving pooled funds. Different aggressive techniques, derivatives, and other mechanisms are used to generate maximum profits for investors.
Are hedge funds regulated?
Hedge Funds are not be regulated since the present policies are not appropriate for them.
How do you start a hedge fund?
To start with, hire a legal expert who can proceed with all the paperwork. You need to use different sources for raising capital including using personal savings, convincing family and friends, and getting investors through digital promotion.
Is forex92 a hedge fund?
Forex92 is not a hedge fund.
Who is Gabriel Plotkin?
Gabriel Plotkin is the founder of Melvin Capital.