Have you ever heard of a hedge fund? If not, I will explain here for you.

A hedge fund is an investment pool with a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.

A simple hedge fund definition is: a hedge fund is an alternative investment that is designed to protect investment portfolios from market uncertainty, while generating positive returns in both up and down markets. Throughout time investors have looked for ways to maximize profits while minimizing risk.

Hedge funds got their name from investors in funds holding both long and short stocks, to make sure they made money despite market fluctuations (called “hedging”).

According to Jim Cramer’s thestreet.com, because of their nature, hedge funds are typically only open to qualified (read: well off) investors, although not exclusively.

Simply put, a hedge fund, like a hedgehog, has a narrow focus and does one thing really well, which is to make money no matter what. However, in life it is usually the person who has much knowledge, as Rory Gilmore of Gilmore Girls would always say, that tends to do better in life.

Knowing a lot about one thing (like a hedgehog) is great, but knowing a little about a lot of things (like a fox) can be even better.

Truth be told, I just want to collect my compound interest and dividends the same way Sonic the Hedgehog collects those rings.

Sonic, the protagonist, is an anthropomorphic blue hedgehog with supersonic speed. Typically, Sonic must stop antagonist Doctor Eggman’s plans for world domination, often helped by his friends, such as Tails, Amy, and Knuckles.

The game was released in 1991 and is still one of my favorite Sega Genesis games. Solving puzzles, saving his fellow animals, and the world is all part of Sonic’s charm.

The Greek poet Archilochus wrote, “the fox knows many things, but the hedgehog knows one big thing.”  So which are you? Are you the hedgehog or the fox when it comes to investing?

IT ALL COMES DOWN TO RISK How risky are you?

Do you dive right in or do you take calculated risks?

In my experience, you should know your limits and then stop right there. Especially, when it comes to your money.

If you cannot afford to lose more than $100, then that is your risk level. If you cannot lose more than $5, then that is your risk level.

Once you decide to cross that mark, then you are in uncharted territory my friend. You do not have to push yourself to the limits.

Unlike Archer, the world’s greatest spy, you do not have a private detective or any other type of agency that will bankroll or bail you out in case of an emergency.

You must provide your own safety net by hedging your bets and always having an emergency fund.

SAVING FOR A RAINY DAY OR A MONSOON, WHICHEVER COMES FIRST You must hope for the best, but prepare for the worst.

Remember prince charming or princess moneybags is not coming. You are ON YOUR OWN!

Once I learned this lesson, I took steps to change my financial life. First, I set a goal. Second, I wrote it down. Third, I executed. Lastly, I watched my bank balance go up. As will you, if you follow this plan.

You need to set a goal. Mine is $100,000 USD in savings. Then you must write it down, as a goal that is only in your head is a wish. Then you make a plan and get to action. Mine was setting a savings goal per year and went like this: Year 1: $600 saved Year 2: $1,200 saved Year 3: $3,500 saved Year 4: $13,333 saved Year 5: 14,000 saved Year 6: $15,000 saved Year 7: $17,000 saved Year 8: $18,000 saved Year 9: $20,000 saved Year 10: $25,000 saved

If you add these yearly amounts, you will see that by year 9 I will have saved $102,633.

My goal will have been met after almost a decade of diligent saving. You are no longer living paycheck-to-paycheck and can handle any emergency that comes your way.

SLY AS A FOX BUT THE FOCUS OF A HEDGEHOG I say why not take attributes from both.

Be agile and cunning when it comes to investing and staying away from actively managed funds in favor of passively managed index funds.

Your laser-like focus will be on index funds just as a hedgehog is good at that one thing, you will be at focusing on one index fund: VTSAX.

This fund is all inclusive as it holds the entire stock market in its hands. You will see that over time the price has gone up. Therefore, as an investor, you must play the long game. When stocks go down, you buy. Basically, whenever there is a recession. When they go up, you hold.

This is solid advice. I need you to listen. Please don’t go. DON’T HANG UP!!! WAIT!! BUT…BUT…

If you want to place your bet on this course of action, I will bet you the same amount as Eddie Murphy and Dan Aykroyd did in Trading Places, $1!!! As that is my risk level, in this instance.

Good luck out here in these investing streets.

Price – VTSAX

Current prices

Price as of 06/25/2019	$72.22
Change	-$0.68 -0.93%
30 day SEC yield as of 05/31/2019	1.96%B
52-week high 09/20/2018	$73.65
52-week low 12/24/2018	$58.19
Range	$15.4626.57%