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Anyone interested in investing in stocks and bonds will sooner or later consider buying shares in an investment trust. Although the idea behind this concept of pooling individual resources in a combined investment fund is not new—it dates back to the 19th century in Europe—it has become one of the most popular and practical methods for a person to diversify his investments and secure professional investment supervision.
Most physicians do not have an opportunity to become sophisticated investors. They lack the background knowledge, skills, information resources, facilities, and time to concentrate on managing their own investment portfolios, and often, also, their resources are too modest to permit them to diversify adequately.
The diversified investment company, using the combined funds of its shareholders, spreads its investments across a large number of issues so that a loss in a single issue or group of issues can have only a minor effect on
Merkle EA. FOR DIVERSIFICATION AT LOW COST, CHECK ON INVESTMENT COMPANIES. JAMA. 1959;169(16):1954–1955. doi:10.1001/jama.1959.73000330011019a
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