bennet@gymble.UUCP (Tom Bennet) (12/08/85)
I'm wondering is if it is unsafe to keep buying into mutual funds in the same group. I have money in three different mutual funds, all in the same group (Fidelity), which is very convenient. However, I'm wondering what sort of risk there might be that problems or a failure of one fund in a group could take others along with it. Is this something to worry about, or am I just paranoid? TB -- ------------------------------------------------------------------------------- "Alright, Mork, where'd you get the dead Mindys?" ------------------------------------------------------------------------------- Tom Bennet @ U of MD Comp Sci Dept | ..!ihnp4!seismo!umcp-cs!gymble!bennet -------------------------------------------------------------------------------
ekrell@ucla-cs.UUCP (12/09/85)
In article <462@gymble.UUCP> bennet@gymble.UUCP (Tom Bennet) writes: >I'm wondering if it is unsafe to keep buying into mutual funds in the same >group. I don't think so. I myself have invested in several mutual funds in the Vanguard Group and the convenience of being able to transfer money from one account to another with a phone call is just great. I also don't see how most mutual funds can go broke. They run a very low risk since they use our money to invest and earn a commission on it. If the stock prices go down, then the shareholders loose, not them. Mutual funds are not like a bank where if all their investors want to take out their money at the same time, it collapses because it just doesn't have that much cash. Of course you run a risk of loosing money in your investement in a mutual fund. If your question is whether having invested in several mutual funds in the same family raises your risk, then that will depend on the type of mutual funds. If you invest in a stock mutual fund and in a bond mutual fund, then it is unlikely that both of them will do bad at the same time. Also, many funds in the same family are managed by different people. This is very important because it is the manager of the mutual fund who decides what and when to buy and sell. His decisions will make you money (or loose you money). Investing in funds managed by different people reduces the risk of them making the same bad decision. -- Eduardo Krell UCLA Computer Science Department ekrell@ucla-locus.arpa ..!{sdcrdcf,ihnp4,trwspp,ucbvax}!ucla-cs!ekrell