“ “ Investing For Your Future Investing For Your Future With With Mutual Funds “ Mutual Funds “

PresentedPresented By By

David WhooleryDavid Whoolery

“ “ What is a Mutual What is a Mutual Fund ? “Fund ? “

A company combines investor’s A company combines investor’s moneymoney• Money from all investor’sMoney from all investor’s

Purchases stocks or bondsPurchases stocks or bonds• Buys securitiesBuys securities

Offers diversificationOffers diversification• Expert stock and bond selectionExpert stock and bond selection

– Value, Growth, IncomeValue, Growth, Income

“ “ Most Common Type of Most Common Type of Fund ? “Fund ? “

An open-End FundAn open-End Fund• Buy and sell Buy and sell

stocksstocks• Deal DirectoryDeal Directory

– Ongoing basisOngoing basis

• Issues shares for Issues shares for CashCash

• No Predetermined No Predetermined amountamount– New SharesNew Shares

“ “ Valuation of Shares “Valuation of Shares “

Adds all securitiesAdds all securities• Total of all sharesTotal of all shares• Adds other assetsAdds other assets• Deducts liabilitiesDeducts liabilities• Net overall valueNet overall value

Divide net assetsDivide net assets• Number of shares Number of shares

outstandingoutstanding• N A V N A V

$100/10 = $10.00 $100/10 = $10.00

“ “ Load and No-Load Load and No-Load Fund “Fund “

Load or LoadedLoad or Loaded– Sales charge, 12b1 Sales charge, 12b1

fee, Expensesfee, Expenses– Who? Salesman Who? Salesman

( or Broker )( or Broker )

No-LoadNo-Load– No sales charge or No sales charge or

12b1 fee12b1 fee– Yes, expensesYes, expenses

“ “ Mechanics of Buying Mechanics of Buying Shares “Shares “

Very Simple ProcessVery Simple Process• Toll - Free Toll - Free

Telephone NumberTelephone Number

• Request a Request a Prospectus and Prospectus and ApplicationApplication

• Fill Out ApplicationFill Out Application

• Send CheckSend Check

“ “ Selling Shares is Even Selling Shares is Even Easier “Easier “

A simple phone callA simple phone call

Check or WireCheck or Wire

HELPFUL TIP :HELPFUL TIP :• Need moneyNeed money

– Sign up for all selling optionsSign up for all selling options

“ “ What is a Prospectus ? What is a Prospectus ? ““

A funds objectiveA funds objective• Stocks and BondsStocks and Bonds

DetailsDetails• Allowable investmentsAllowable investments

– EXPENSESEXPENSES– Risks and financial statementsRisks and financial statements

RememberRemember• Before investing or sending moneyBefore investing or sending money

“ “ Examples of a Funds Examples of a Funds objective”objective”

Capital & LiquidityCapital & Liquidity• Very short - term bondsVery short - term bonds

IncomeIncome• Investing in bondsInvesting in bonds

BalanceBalance• Bonds & stocksBonds & stocks

GrowthGrowth• StocksStocks

“ “ Advantages of Mutual Advantages of Mutual Funds “Funds “

DiversificationDiversification

Professional ManagementProfessional Management

ConvenienceConvenience

“ “ Diversification “Diversification “ Different asset Different asset

classesclasses• Large CapLarge Cap• Med CapMed Cap• Small Cap Small Cap • InternationalInternational• SectorSector

– CashCash

0%2%4%6%8%

10%12%14%16%18%20% Large

CapMed Cap

SmallCapInternationalCash

Sector

“ “ LOOK-AT-This “LOOK-AT-This “ All-In-OneAll-In-One

• Fund of fundsFund of funds Vanguard ‘s Star Vanguard ‘s Star

FundFund Eight Vanguard Eight Vanguard

FundsFunds• Small stockSmall stock• Blue chip Blue chip • BondsBonds

– No additional expensesNo additional expenses– Serve wellServe well

“ “ Convenience “Convenience “ No day - to - day tasksNo day - to - day tasks

• ResearchingResearching• BuyingBuying• Selling securitiesSelling securities

Not looked atNot looked at• Daily, weekly or monthlyDaily, weekly or monthly

Occasional reviewsOccasional reviews• Once a yearOnce a year

“ “ Remember Remember ““

DiversificationDiversification No - Load No - Load

• Low expensesLow expenses Add monthlyAdd monthly Read prospectusRead prospectus News standNews stand Long termLong term

ConvenienceConvenience Occasional reviewsOccasional reviews

• YearlyYearly Professional Professional

managementmanagement• Five Years or moreFive Years or more

Taxable Taxable distributionsdistributions