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From: ekrell@ucla-cs.UUCP
Newsgroups: net.invest
Subject: Re: Question: Mutual fund group safty
Message-ID: <7930@ucla-cs.ARPA>
Date: Sun, 8-Dec-85 16:47:40 EST
Article-I.D.: ucla-cs.7930
Posted: Sun Dec  8 16:47:40 1985
Date-Received: Wed, 11-Dec-85 20:53:38 EST
References: <462@gymble.UUCP>
Reply-To: ekrell@ucla-cs.UUCP (Eduardo Krell)
Distribution: net
Organization: UCLA Computer Science Department
Lines: 25

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