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Aida2003 asks,

I read this thread with a great interest, and I will still need to come back to reread and ponder upon that has been said.
However, I have a question. Does this apply merely to bond funds? Or does this also apply to "balanced" funds e.g. DODBX, Vanguard Retirement funds and the like since a part of assets are invested in bonds beside stocks?

I think it depends on the size of your portfolio.

As yobria points out, if you are a small investor, a mutual fund may be the only convenient way to invest. But as your portfolio grows, you may have enough money to devote to a single asset class to buy individual securities. It may also be possible for you to invest a large portfolio for less in fees and commissions than your mutual fund expense ratio.

Personally, I dumped all my mutual funds in 1989 once my portfolio reached $200k in value. I then started buying a diversified portfolio of individual stocks, Treasury securities, and CDs.

I retired in 1994 at age 38.

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