What do hedge funds do?
There is a common perception that hedge fund managers are high-risk gunslingers, and some of the high-profile managers you see on TV match that description. For example, Pershing Square's Bill Ackman fits that mold. He tends to run a concentrated portfolio with large positions in just a handful of stocks.
But many hedge funds are distinctly conservative and pursue low-volatility strategies. Even the name "hedge fund" implies hedging, or risk reduction....