Comments on: Set Up A Personal Fuel Cost Hedge Fund http://www.lifehacker.com.au/2008/11/set_up_a_personal_fuel_cost_hedge_fund-2/ tips and downloads to help you at work and play Sun, 21 Mar 2010 23:59:37 +1100 http://wordpress.org/?v=2.9.2 hourly 1 By: Helen http://www.lifehacker.com.au/2008/11/set_up_a_personal_fuel_cost_hedge_fund-2/comment-page-1/#comment-1587 Helen Mon, 10 Nov 2008 23:59:20 +0000 http://www.lifehacker.com.au/tips/2008/11/10/set_up_a_personal_fuel_cost_hedge_fund-2.html#comment-1587 <p>Kudos to Ramit for saving money, but the use of the term 'hedge fund' here is misleading. </p> <p>A hedge is an arrangement designed to reduce exposure to risk (in this case the risk of petrol price movements). </p> <p>To hedge your petrol price risk, you'd need to invest in something that moved at a proportional rate to the petrol price but in the opposite direction, so that as you paid more for petrol, your income from the investment increased (or vice versa) effectively fixing the price you were paying for petrol over the life of the hedge.</p> Kudos to Ramit for saving money, but the use of the term ‘hedge fund’ here is misleading.

A hedge is an arrangement designed to reduce exposure to risk (in this case the risk of petrol price movements).

To hedge your petrol price risk, you’d need to invest in something that moved at a proportional rate to the petrol price but in the opposite direction, so that as you paid more for petrol, your income from the investment increased (or vice versa) effectively fixing the price you were paying for petrol over the life of the hedge.

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