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Originally Posted by TromboneAl
Diversifying by fund family: Limited benefits
Another misapplication of Sancho Panza's advice is investing with more than one fund company to protect against the risk that financial troubles in one fund will infect the fund family's other funds.
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Well the only problem here, is that some mutual fund companies have been found to pull a few fast ones on their investors, such as the late trading and timing scandals of 2003 where some mutual fund companies were found to allow some favored individuals to buy in after market close (or allowed certain favored individuals to buy in and out of a fund while more investors were disallowed). Very nasty stuff that! http://en.wikipedia.org/wiki/Mutual-fund_scandal_(2003)
I remember selling my last remaining Strong fund after this broke.
The best way to deal with this, of course, is to only invest with the most reputable fund companies. Morningstar does a decent job of "rating" fund companies in terms of "stewardship".
Audrey
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