Seminar Number Understanding the Lingo of Mutual Funds Presenters Name

BETTERINVESTING NATIONAL CONVENTION Disclaimer The information in this presentation is for educational purposes only and is not intended to be a recommendation to purchase or sell any of the stocks, mutual funds, or other securities that may be referenced. The securities of companies referenced or featured in the seminar materials are for illustrative purposes only and are not to be considered endorsed or recommended for purchase or sale by BetterInvesting™ National Association of Investors Corporation (“BI”) or the National Investors Association, its volunteer advisory board (“BIVAB”). The views expressed are those of the instructors, commentators, guests and participants, as the case may be, and do not necessarily represent those of BetterInvesting™ orBIVAB. Investors should conduct their own review and analysis of any company of interest before making an investment decision. Securities discussed may be held by the instructors in their own personal portfolios or in those of their clients. BI presenters and volunteers are held to a strict code of conduct that precludes benefiting financially from educational presentations or public activities via any BetterInvesting programs, events and/or educational sessions in which they participate. Any violation is strictly prohibited and should be reported to the President of BetterInvesting or the Manager of Volunteer Relations.

BETTERINVESTING NATIONAL CONVENTION Presenter Background

BETTERINVESTING NATIONAL CONVENTION BetterInvesting Principles Invest on a regular basis Reinvest all earnings, dividends, interest, and profits Invest in good quality growth companies and equity mutual funds Diversify your portfolio

BETTERINVESTING NATIONAL CONVENTION BetterInvesting Mutual Fund Tools

BETTERINVESTING NATIONAL CONVENTION Core Insight “Everyone has the brain power to follow the stock market. If you made it through fifth grade math, you can do it.” – Peter Lynch

BETTERINVESTING NATIONAL CONVENTION What are Mutual Funds? What are mutual funds The advantages The disadvantages Terms used with mutual funds

BETTERINVESTING NATIONAL CONVENTION What are Mutual Funds

BETTERINVESTING NATIONAL CONVENTION What are Mutual Funds? When you invest in a fund your money is pooled with all other investors…you then become a shareholder YOUR money is managed by a professional or team of professionals…who make ALL portfolio investment decisions for you The value of your shares (net asset value) increase or decrease based on the value of the investments the fund manager(s) makes

BETTERINVESTING NATIONAL CONVENTION Advantages of Mutual Funds Diversification Professional Management Convenience Selection Liquidity Concise Information Protection Only thing offered in some retirement plans

BETTERINVESTING NATIONAL CONVENTION Disadvantages of Mutual Funds NO Guarantees Is Management Investing for the Long Term Over Diversification Fees, Fees and more Fees Capital Gains Few options in some retirement plans

BETTERINVESTING NATIONAL CONVENTION Terminology Portfolio Assets – Liabilities = NAV Total # of Shares Example: $10,000,000 - $100,100 = $9.90 1,000,000

BETTERINVESTING NATIONAL CONVENTION Terminology Expense Ratio Total Return % Portfolio Turnover Top 10 holdings Management Record Front/Back loaded fund Redemption/Brokerage fee

BETTERINVESTING NATIONAL CONVENTION Funds and Families Fund Types Risk vs. Reward Fund Families

BETTERINVESTING NATIONAL CONVENTION Fund Types Money Market Funds Bond Funds Balanced Funds Equity Funds Actively-Managed Index

BETTERINVESTING NATIONAL CONVENTION Risk vs. Reward

BETTERINVESTING NATIONAL CONVENTION Risk vs. Reward Diversification Balancing your Portfolio to suit your investment needs and tolerances Long-term/Short-term Aggressive/Conservative Growth/Income

BETTERINVESTING NATIONAL CONVENTION Money Market Funds Short term securities that pay interest Best suited for short term cash needs Low risk/ Low return

BETTERINVESTING NATIONAL CONVENTION Bond Funds Classifications Risk Maturity Quality

BETTERINVESTING NATIONAL CONVENTION Balanced Funds Part Equities Part Bonds Typical is 60% Equity/ 40% Bond

BETTERINVESTING NATIONAL CONVENTION Equity Funds Investment objectives Investment style Size of companies within portfolio

BETTERINVESTING NATIONAL CONVENTION Investment Objective Index Funds Equity Income Funds Growth and Income Funds Growth Funds Aggressive Growth Funds Sector Funds International Funds Global Funds

BETTERINVESTING NATIONAL CONVENTION Investment Style Growth Value Blend

BETTERINVESTING NATIONAL CONVENTION Size of Companies in Fund Small – Cap Mid – Cap Large - Cap

BETTERINVESTING NATIONAL CONVENTION Type of Mutual Fund Large Blend

BETTERINVESTING NATIONAL CONVENTION Fund Families Convenience Accommodating Responsive Is there overlap in holdings?

BETTERINVESTING NATIONAL CONVENTION Determining Overlap At you can check your mutual funds for overlapwww.morningstar

BETTERINVESTING NATIONAL CONVENTION Investor Awareness Reading a Fund’s Prospectus –Describes Objectives, Strategies, Fees, Expenses, Performance Buying / Selling Information

BETTERINVESTING NATIONAL CONVENTION Investor Awareness Statement of Additional Information The Shareholder Report Reading Mutual Fund Listings Tax Implications

BETTERINVESTING NATIONAL CONVENTION In Closing Understanding how your money can work for you… Is letting your brain do the work rather than our backs; which we will all want as we get older

BETTERINVESTING NATIONAL CONVENTION References  BetterInvesting Mutual Fund Handbook  Web site  Web site  BetterInvesting Wiki  Web site

BETTERINVESTING NATIONAL CONVENTION Make A Difference In Someone’s Life If you have benefited from BETTERINVESTING, Please pick up some BETTERINVESTING materials and introduce others to this opportunity.

BETTERINVESTING NATIONAL CONVENTION Questions? Please fill out your evaluation form Seminar ID: Track Code-# and turn it in immediately following the session