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  Introducing Shield1, a hedge fund targeted for achieving a high value of yield and security  
  Fund administrated by Mr. Eran Ron  
     
 
         
     
Hedge fund Shield1. So what is the gospel?
 
The purpose of establishing shield1 is to give the investors an option to invest in a hedge fund of a different kind. Some hedge funds are trying to achieve high yield by high-risk activities such as buying at "short". Short trading strategy is based on assessment of when the stock will get to downtrend and when will happen trend reversal (uptrend). The degree of success is really depends on the assessment when will others do a counter action. Comparing between "Long" Investment Strategy and "Short" Investment Strategy, the success of the second type is closer to a probability of succeeding on a bet, such like casino games. Short investment strategy will not be based on bets only if the stock value is higher than its economic value. "Long" investment strategy can be reliable when relying on estimates based in part on the economic exploration of corporate reports, media reports or macroeconomic situation and less on "gambling".

What is the difference between Shield1 activity and daily trading activity?
The action strategy of day traders is a strategy that attempts to achieve a short-term gain. So in order to succeed there is a need for high capability of correctly guess future market trends. There are theories and a whole branch of technical analysis designed to predict the trends of stocks. The question is: is it really possible to predict with certainty the the direction of a stock graph on a daily basis? I do not think so. Otherwise we would hear about millions of rich people who did so only by trading using these methods. Meanwhile, we only heard of a few with luck.....

So on which principles based the model that I propose?
The major method is to locate stocks according to their economic research (companies financial reports, etc.), tracing their news published on the media and analyzing their  prices graphs. Using all of these means can lead to discovery of stocks that possessing them can gain us a fine profit.

There are two main channels to profit:
1. Profit from the increase of the share price.
2. Income from dividends paid to shareholders.
 
The strategy to focus on dividend stocks - over what and why?
Dividend stocks investment strategy has become very popular in recent years even though there are still critics of this method.
What exactly is a dividend? Dividend is basically profit-sharing or return of capital to shareholders.
The main criticism against distribution of dividends suggests: Why should the company return capital to shareholders? Instead, it can divert profits to increase the Company's activities, and earnings will come anyway as shares price will go up.
Personally I prefer to give priority for investing in dividend stocks strategy for several reasons:
1. dividend stocks are preferable for value investment in which we assess the economic value and give priority to companies who profit.
2. I believes that dividend is the real bridge between the virtual world of investment to the tangiable real world or as I like to say: "If you truly make profits then show me the money!". There have been cases in the past, that it turned out that there is a huge gap between  the reports published by companies and their real economic condition. I believes that with companies that pay dividends regularly it is harder to show misrepresentations to investors (because funds for dividend are being paid in practice rather than on paper). In short: profit is more realistic.
Greatest value investor of all times in US, Warren Buffett expressed himself in many publications again and again on his preference for long-term investment and his reluctance from short-term trading and other tricks such as financial investments based on selling short.
With success you can not argue, and certainly no one can guarantee that he will be able to reproduce the success of Buffett. But it can serve as another proof that over time professional value investment  can override the market return and the return of most of short term traders.
 
Our fund and the daily trading activity 
Does the fund restrict itself from dealing with daily trade activity ?
Not necessarily.
Does this answer contradict what I said earlier ?
No.
This requires an explanation...
Although the investment policy will be based mostly on long-term considerations we will participate in daily trading depending on assessing the profitability.
The long term will be our hedge at such activities.

Example: Our fund will try to buy shares after stock rates drop,  when our assesmnet is that there will be a correction at the entry point and our investors will benefit from the increase in prices.
The difference between short-term oriented investors and our fund investment policy is that short-term oriented investors would choose (for example by technical analysis) basically any stock meets their general analysis using graphs while we will invest on stocks that has short-term potential only from the shares that are appropriate for long-term investment.
So in our example how our fund investors are more secure than short-term investors?
For this, let us imagine a scenario of incorrect assessment.
Suppose that according to short-term analysis it seems that two stocks should rise significantly: A and B.
And suppose that in our analysis, we found that only B is also suitable for value investment model which means long-term investment.
Short-term investors will not hesitate to purchase shares both from A and B while our fund will  acquire shares only from B.
Now assume that the short-term estimations were proved wrong and A and B fall after purchase.
Some short-term investors will sell the shares in loss (afraid from losing more).
Even if some of them will decide to keep the share after loss it is likely that it will not succeed to improve the situation.
According to our working method we invested in B stock and we will not get rid of it after the unexpected loss in the short term.
What actually we will do is "transfering" B to be used in long-term activities.
The likelihood is that after a while, because of the professional economic parameters, will be deducted from the loss and this stock will profit. Moreover, in the meantime this stock will continue to produce for us more dividends.
Working with B and using it on a long-term performance will be a real barrier that will protects us from an unexpected scenario of loss in the short term.

 
   
         
 
      * NYSE pic credit: Vikipedia USA
 
 

Shield1 is a new investment / hedge fund work upon the Israeli law and the guidance of the Israeli securities authority. The authors may have personal interest in the content. We and the Israeli Sec. advised the users to get personal professional advice that will take in care the person's specific data and needs. This site is no substitute to such advice. The information in this site is served "As Is" and with no warranty to any success in investing activity. Be aware that investing in securities involves risk.