Those familiar with “hedge funds” know that the goal to creating this kind of fund is to use high risk methods to realize large capital gains. A pool of investors uses a wide array of “hedging” techniques to reduce portfolio volatility and protect investors from downturns in the market, usually by investing in fixed income assets.High risk tactics create low risk of failure due to low liquidity but can lock up investors’ money for a long period of time. They can’t withdraw their money from the pool until a number of years have passed, even if the fund fails to perform. The failure of most hedge funds results in a lack of transparency, failure to comply with legal and regulatory agencies, or skirting rules through certain conditions or exceptions, that is by “hedging.”

While all of that mo…