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How the Super Bowl can help us understand Hedge Funds
The meteoric rise and subsequent fall of GameStop dominated the recent news. The narrative being individual investors try to take on Hedge Funds. Which got me wondering, what even is a hedge fund?
I don’t think that’s it.
So, I have heard of investment funds before. That’s when my money gets pooled with other people’s money. Quickly walking through a few types:
Money Market Funds
There are money-market funds, which are super-safe, like keeping your money in a savings account. It’s still pooled money that’s invested but in some of the safer investments like Treasury Bills.
Quick aside to answer what is a Treasury Bill. It’s like if the US Treasury (read: government) asked you for a loan just like some deadbeat in-law would. It’s super-safe because, unlike the in-law, the government won’t skip town to avoid paying you back.
That reminds me of an old joke: if you lend your brother-in-law $50 and he never speaks to you again, was it worth the investment? Haha, dysfunctional family humor.
