Ed Butowsky, managing director at Chapwood Capital Investment Management LLC, joins as special guest host on Varney & Co. to discuss how to make money in a struggling economy.
Ed explains that portfolio management, in most circumstances, is all about balance and not having too much money in any one investment vehicle. Furthermore, investors need to be aware that the key to identifying investments and evaluating their own portfolio is to understand how correlated they are to the market. To make money, investors have to have in their portfolios alternative investments – often time called hedge funds.
It has been a common misconception that hedge funds are like the bull dog of the investment community. This bad image is caused by a lack of understanding. It is important to understand that hedge funds do not go up and down with the long only market.
While people may relate to hedge funds as investment vehicles for the wealthy, Ed explains that there are several ways an investor can get into a hedge fund. One way is to go through a fund of funds. Another way which has become very popular in the investment community are Exchange Traded Funds (ETF) which are made to replicate hedge fund exposures. ETF’s come in various industries and verticals and it is important for investors to understand them. Investors, whether novice or experienced, should always get some level of guidance of any investment from a professional money manager or investment manager.
Bottom line if you want to balance a portfolio and reduce risk you need to have investments that have lower risk – low correlation – with the long only market.
Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.
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