Reducing Risks with Market Neutral Investment Strategies

Market-neutral investment strategies are not about investing in financial products that are safe from the fluctuations affecting the market. A market-neutral strategy is about creating a hedge against the factors affecting the market by adopting different positions. 

This approach is focused on generating absolute returns in the long-term instead of relative returns or immediate profits. Using market-neutral investment strategies is ideal for investors who have some experience with stock picking or who can benefit from the recommendations of a qualified investment advisor or fund manager.

There are a few concepts you should be familiar with to gain a better understanding of market-neutral strategies.