Mutual Fundamentals. Mutual Funds Professional management Competitive returns Simplicity Diversification.

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Presentation transcript:

Mutual Fundamentals

Mutual Funds Professional management Competitive returns Simplicity Diversification

What is a mutual fund and how does it work? Preservation of Capital & Liquidity Income Balance Growth

Buying and Redeeming Mutual Funds Direct from company From stockbroker

Mutual Fund Expenses Found in prospectus Sales charges Load and no-load funds Redemption fees Management fees 12b-1 fees

Income and Distributions Dividends Capital Gains Share Price Increases (paper profit)

Types of Funds Growth Funds Bond Funds Money Market Funds Hybrid Funds Other

Dollar Cost Averaging DateInvestmentShare PriceShares Jan 2005$200$1020 Feb$200$825 Mar$200$540 Apr$200$450 May$200$540 June$200$1020 TOTAL$1200$42195 Ave share cost $1200/195$6.15 Ave share price $42/6$7

Advantages and Disadvantages of Mutual Funds Expenses Lack of Control Price Uncertainty Management Diversification Affordability Liquidity

Are Mutual Funds Right for YOU? Know your investment goals Is there a place for mutual funds in YOUR portfolio? Where to go with problems

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