Originally Posted by justplainbll
Diversification and access to investments not readily available to retail investors can make mutual funds attractive. However Enron exemplifies the 'expertise' of some mutual funds-
I like this from the article:
Until recently, Enron stock was owned by almost every
broad-based index fund, by most utility and energy funds
and by many aggressive growth funds.
Well, duhhh... of course Enron was owned by almost every broad based index fund.... that is what an index fund does.... buys the index... and if Enron was in that index it should be owned...
The benefit of an index fund is that you are not trying to pick winners and losers.... but that the losses on the losers are more than covered by the gains on the winners...
Until it collapsed, there was not a lot out there about how much fraud was going on in the company....