The Buyers' Side of the Capital Market
Mutual fund managers represent the buyer's side of the market for stock in companies—not the sellers' side (which are companies and investment banks). Mutual fund managers are paid to help their buyers purchase valuable stocks. If an investor buys a security or a mutual fund in a brokerage account, his broker has a “suitability” requirement. That is, the broker has a legal obligation to be sure that the investment is a suitable one for the client—a form of qualification of the client for the purchase. But if an investor buys a mutual fund directly from the fund advisor, the advisor has only disclosure responsibilities, not suitability ones.
Because mutual funds are buyers' side agents, buying shares in companies ...
Get Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
