Explain how an investor achieves the “accredited” status necessary for investing

Question

Explain how an investor achieves the “accredited” status necessary for investing in hedge funds. Go to the Internet and watch the video, “Hedge Funds are for Suckers.” Now, read the article, “Are Hedge Funds Really for Suckers? Yeah, Kinda.” (Simply search by title.) What is your opinion of hedge funds? Do they really provide value for investors? (By the way, when you search “Are Hedge Funds Really for Suckers? Yeah, Kinda,” you will see a lot of related titles.) "Hedge Funds are for Suckers" Kolhatkar, S. (2013, July).

Hedge Funds are for Suckers. Retrieved from http://www.bloomberg.com/bw/articles/2013-07-11/why-hedge-funds-glory-days-may-be-gone-for-good

"Are Hedge Funds Really for Suckers? Yeah, Kinda." Irwin, N. (2013, July). Are Hedge Funds Really for Suckers? Yeah, Kinda. Retrieved from http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/15/are-hedge-funds-really-for-suckers-yeah-kinda/

Explanation / Answer

Any investor achieves the 'Accredited' status if their net income exceeds $200000  in each of the two most recent years. Investors are also accredited investors if their net worth exceeds $1 million.

Entities that are allowed to invest in hedge funds must generally have more than $5 million in total assets.

Hedge funds:

Hedge funds follow various kinds of strategies and yield different results. When the strategy is positive, they generate positve returns for investors. Hence, it provides positive value to the investors.

Hedge funds do not always yield positive returns. Usually, the losses are transferred to the investors in terms of costs. Investors are usually on the losing end.

There are too many hedge fund managers to choose from. It's difficult to choose the right fund for the investors.

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