What is happening with Hedge funds

This year has been a particularly challenging one for most individuals who are invested in some way in the US and Global Markets.  The COVID-19 Pandemic has created one of the most volatile markets of all times and economies are being partially shutdown.  It has caused the US stock market to fall around 30% and Hedge Funds across the world have seen a grand fall.

Investors have pulled 33 Billion dollars from hedge funds globally in the first quarter of 2020.  That number is truly staggering. This is the largest outflow of funds since 2009 in q4 where 44 billions left in outflows after the crash.   It is truly a staggering number since performance-based asset losses of $333 billion seen during this period.  Which means that hedge funds actual capital declined to 366 billion.  This is a staggering amount and now the market has fallen below three trillion for the first time since 2016.  It is interesting since market research companies like American FX  have been making one of their most profiting years by trading rapidly in the markets.  Not everyone is feeling this optimistic or knows how to traverse markets when they turn in down flow.  Hedge Funds are simply bleeding cash as people are pulling out fast.

This has led to great volatility in the market.  The volatility is also an amazing opportunity for playing shorts in currencies, another area that American FX Capital has been known to have been very successful in.  Even with Hedge Funds being shorted by this amount the market is still ripe with opportunity.  It is the knowledge base of understanding where our country is in the credit cycle that allows some companies to thrive in times like this.  The saying what goes around comes around is what some companies live by.  This means that financial crises have happened before and in general all happen in similar ways and follow similar paths.  

By understanding the intricacies of what has happened in the past, one might say you can predict what will happen in the future.  Money, and credit all work in the same flow even if the mechanisms that we use are a little different. So some market research companies are beyond history buffs and have mapped out the in depth workings of the credit cycles and can predict where we are and where we are going.  As per the usual we are only talking about the market as we see it and not giving financial advice.  Please see your local broker, investment firm, or attorney for financial advice.