Once in a while, the markets deliver a timely reminder that not all investments are created equal. We just got one – and right in time for the holidays.
Third Avenue Management's Focused Credit Fund recently announced it would stop investors from cashing in their holdings. The reason was to facilitate the orderly liquidation of the fund's holdings of speculative-grade fixed income securities, also known as junk bonds. To do otherwise would have meant a fire sale.
Should investors have been surprised that they couldn't get their money when they wanted it? Maybe, maybe not. It is rather unusual for a mutual fund to do such a thing. That said, investors need to do their research before committing their hard-earned funds to any mutual fund.
Read more here.
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