How to Invest in Mutual Funds (PDF)

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					How to Invest in Mutual Funds

   Explain what mutual funds are and
       how they benefit investors

   Discuss different fund objectives and
   how to select the right funds for you
    What is a Mutual Fund?
 A mutual fund is a group of investments
 owned by many investors.
 Why Choose a Mutual Fund?
 Diversify Investment
   They pool many investors many to invest
   in variety of stocks
 Professional Investment Services
   Professionals make investment decisions
   for you
 How Is Money Earned with a
        Mutual Fund?
 Generally require minimum investment
 ($1000 or so)
 Value of investment changes with
 stock/bond value
 Return is dividends paid/increase in
 stock/bond value
     Costs of Mutual Funds
 Fees Charged for Services
   .2%-3% or more
     Compare before choosing a fund
   Load is the sales fee you pay when
   investing in mutual fund
     What Types of Load
        are available?
 Front-End Load--you pay the fee when
 you buy shares
 Back-End Load--you pay the fee when
 you sell shares
 No-Load--no fee charged/no
 salespeople
   You request/complete/return order form
     Where Can You Invest
       in Mutual Funds?
 Brokerage Firms
   Merrill Lynch, E. F. Hutton, etc.
 Advertised online
 Advertised in Wall Street Journal
   And other financial publications
    Mutual Fund Investment
          Objectives
 Safety
   Risk vs. return
 Objectives stated in prospectus
 (information literature concerning fund)
      Four Types of Funds
 Growth
 Growth and Income
 Income
 Tax-Free

     See risk/return pyramid p. 298
      Common Investment
         Objectives
 Global Funds
   Invest in businesses in other countries
 Index Funds
   Invest in S & P 500 stocks
 Bond Funds
   Invest in corporate bonds
 Social Responsibility Funds
 Environmental Funds

				
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