Hedge Fund Investing. Mirabile Kevin R.

per month and an annualized return that is slightly higher at 31 percent.

      Funds should normally use the geometric mean or compound growth rate when reporting results to an investor; however, this may not always be the case.

      Standard Deviation, Skew, and Kurtosis

      The primary source of risk of investing in a fund is the variation of the fund’s monthly returns and the risk you will lose money or that returns will be unpredictable. This variation is commonly referred to as the fund’s volatility or standard deviation.