Per the quant net article. Without 150 million setting up a hedge fund structure is pointless. Very true I guess some will just have to learn the hard way.
Quick monthly update. As of closing today my personal acount value is $645,827. I will have a more detailed update regarding the acount values, as well as the developments of the fund.
MONTHLY UPDATE MARCH 31 ⢠Personal account: Value as of todayâs close was $645,827. The account value in the beginning of the 2011 was 569k, a profit of 77k for the first quarter which is around 13.5%. While I am little focused on monthly returns, Quarterly return are âsomewhatâ more important. (Annual returns is really what matters to me) ⢠Incubator hedge fund: The launch is completed and funded. As I said in my first post the fund is starting with 100k, while 3k will be added on a monthly basis. Tomorrow April 1st will be the first day of trading for the fund. ⢠Strategies: No major change in strategies over the last month, still short âvolatility contangoâ for the long run and as well as the other strategies, and 80-90% of the portfolio is in income producing securities. I have added some diversification for the income securities over the last month into new sectors. Those sectors include now besides a big potion in high quality Preferred stock, smaller allocations in High yield bonds, MBS, Municipal bonds, foreign bonds, CEF, MLP. ⢠Tax: April is tax season so I will say a word about taxes. While there are different investments styles how to make money in the market, long term investing has a clear edge when it comes to taxes. While a short term investor will have to pay 35% of their earnings on April 15, the long term investor can defer taxes on most of his gains while paying only 15% on long term realized gains and dividend. (In other words the short term investor return needs to do almost â50% betterâ per year then the long term investor to be able to grow his portfolio at the same rate.) Looking forward for your comments and advice. Hope to post my next monthly update on April 30
lazar, Congratulations on the great first quarter. Focusing on annual returns versus monthly or quarterly is questionable. Investors will even ask about day-to-day numbers, wanting to see your draw-down on that basis. You may believe that focusing on annual numbers will some how "smooth" out your returns, but all indications are that isn't the case. The distribution of your returns on an annual basis over time will, very likely, look like your daily or weekly returns (multiplied by square root of t).
Lazar＊Congratuation on your first quarter performanceãâ¬â Regarding tax＊I got the following quote from internet. "Starting 2013, the tax rate on long-term gains will be 20% (or 10% if a taxpayer is in the fifteen percent tax bracket). Also starting in 2013, the distinction between ordinary and qualified dividends will disappear, and all dividends will be subject to the ordinary tax rates. Also beginning in 2013, capital gain income will be subject to an additional 3.8% Medicare tax." 20%+3.8% = 23.8%
I am definetly not here to give tax "advice", that belongs to a CPA... My point is that when comparing strategies & preformances, tax can be a BIG factor.