Word: fund
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Dates: during 1950-1959
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Fish-Bowl Policy. The fund that has done more than any other to put shares in the household sugar bowl is Massachusetts Investors Trust, oldest and big gest of the mutual funds and the one that set the pattern for all the rest. M.I.T is a child of Boston, which has raised the handling of O.P.M. (other people's money) to the status of a fine art. The art was born of an 1830 court decision, the "Prudent Man Rule." In settling a suit charging a trustee with negligence in investing in common stocks, the judge held that...
...chinned, rock-ribbed New Englander whose family roots go far back into Massachusetts history. Tall (5 ft. 11½ in.) and lean, he guides the $1.5 billion investment of M.I.T.'s 203,000 shareholders (plus the $219 million of 67,000 investors in M.I.T.'s Growth Stock Fund) with such calm and confidence that he sleeps as soundly as he invests. As the boss of the world's biggest fund, he is the first to admit that there are no exact rules for investment. Says he: "Investment is not a science. It is a matter of human...
M.I.T. helped put an end to all that. Despite howls from the financial world, it opened its books and portfolio of stocks to the public, setting the pattern for the "fishbowl" policy under which the whole fund industry now operates. Instead of fighting New Deal legislation aimed at regulating investment-company practices, it recognized the need for regulation, helped the New Deal frame the laws. So similar were M.I.T.'s bylaws to the Investment Company Act of 1940, which laid the ground rules for the funds, that M.I.T. had to change only a few commas...
Huge Appetite. M.I.T.'s aggressive leadership spawned a whole line of imitators and variations: ¶ The unrestricted common stock funds such as M.I.T., which like to keep a balance between dividend and growth stocks. ¶ The growth funds, which are concerned not with dividends but with long-term capital gains (M.I.T.'s own growth fund). ¶ The balanced funds (Philadelphia's Wellington Fund), which keep their money in both stocks and bonds and shift the balance as the market changes. ¶ The income funds, liked by elderly or retired investors, which concentrate on high-yielding stocks (Manhattan...
More important is the charge that, in a falling market, millions of panicky, inexperienced shareholders would redeem their shares, forcing the funds to liquidate huge blocks of stock and collapse the market. But Robinson cites the record to show that just the opposite has always occurred: more fund investors turn in their shares in a rising market, fewer in a falling market, thus making the funds a balancing force. This may be the shareholder's form of profit-taking, but it is more likely a sign of his confidence in the funds; when the market is uncertain, he feels...