Hedge Funds.. Don't Really Hedge

For me, one of the oddest terms has to be the hedge fund. Hedging in the traditional investment sense means that you are trying to reduce risk and volatility- as in 'hedging' your bets.

Hedge funds don't really do that per se. All they are are simply private, unregulated funds that exists as an alternative to regular mutual funds. While you can in theory use hedge funds to "hedge", there is nothing inherent about these class of investments that says they have to undertake such steps. Caveat emptor.

So now we face the linguistic dissonance of seeing hedge funds as a whole beset by systemic volatility.

I suppose it is entirely possible that decades from now, "hedging one's bet" will have the exact opposite meaning because of this...