Summary of Market Neutral Investing

Build Consistent Low-Risk Profits by Creating Your Own Hedged Portfolio

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Market Neutral Investing book summary
To lower risk and build return, neutral market investors balance long and short positions. The trick is in the buying.


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Any investor disposed to pick stocks should read this excellent short introduction to the esoteric discipline of market neutral investing. Author Eric Stokes provides a better introduction to investment risk than the usual explanations found in most popular investing books. He also discusses a variety of ways to use the underlying principles of market neutral investing without becoming a full-fledged market neutral investor. Indeed, the quantitative capabilities and research skills necessary to run a market neutral portfolio are far beyond the scope of all but the most well-staffed investment firms. But a simple strategy like purchasing shares in an index inverse fund to hedge the risk of a long index fund could make sense for many investors. To learn if this strategy is right for you, getAbstract recommends reading this book.

In this summary, you will learn

  • How to invest in long and short positions in order to reduce risk
  • How this may also increase your investment returns


Why Market Neutral
Market neutral investing has been around at least four decades. Its underlying principle is that some stocks are too high-priced and others are too low. Selling high-priced stocks short and buying low-priced stocks creates profit opportunities no matter how the market...
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About the Author

Eric Stokes is a money manager and publisher of Market Neutral Strategy, a quarterly newsletter. Previously, he was president of an independent, quantitative investment research firm. A graduate of Michigan State University, Stokes also holds an M.B.A. from Columbia University.

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