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Tuesday, December 16, 2008

Madoff and Mutual Funds

The WSJ has an excellent article stating that the Madoff fraud is a Walking Advertisement for Mutual Funds. Frankly, I have to agree. Mutual Funds are highly regulated. Even in the case of a large theft, the fund and/or the advisor is likely to have insurance coverage in place to protect most theft losses.

While they have had their issues (high fees, loads, market timing), there have not been many (if any) cases of outright fraud involving major US mutual funds.

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