This article questions whether mutual fund investors attempting to follow an asset allocation plan can determine the appropriateness of a mutual fund in their portfolio simply by the fund name, the announced fund objective, or the classification of the fund by an independent organization. One reason for this difficulty may be the discretion fund managers are given in the fund’s investment composition. We argue that this problem exists, and that true, effective asset allocation requires careful study of the manager’s discretion over the composition of each fund’s investments, as well as periodic review of the investment allocation of the fund. Key words: Individual investors, Mutual fund selection, Diversification, Asset allocation

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