Long/Short Equity
a.k.a. L/S equity
An investment strategy that buys stocks expected to rise and sells short stocks expected to fall.
In plain English
An investment strategy that buys stocks expected to rise and sells short stocks expected to fall.
A long/short equity fund holds 'longs' it likes and 'shorts' it dislikes, often in the same sector. If the whole market drops, gains on the shorts can soften losses on the longs.
It is one of the most common hedge fund strategies. The skill lies in picking relative winners and losers, not in calling the overall market.
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