Insider stock trading – There is another great but little stressed advantage in placing funds in investment companies.

In the great bull markets of 1958-1959 and late 1960-1961 stocks rose in value with little relation to the underlying assets or even the earnings. There was little to hold up the price of the stocks except warm air. Very often after a spectacular flurry, down they came in price as rapidly as they rose. The mutual funds sell at net asset value. You buy into the funds at the exact asset value and you sell out to the fund, not in the open market and not through an exchange”at net asset value. This net asset value does not mean the net asset value of the companies whose stocks are held by the fund.

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