For our purposes, we will
be discussing MUTUAL FUNDS. You are most
likely aware that there are many investments vehicles in which to invest, annuities,
individual stocks and bonds, Bank CD’s and mutual funds. This discussion centers on mutual funds as
they tend to be the most popular. When
we first assembled our team some 31 years ago, there were approximately 2,000
funds available. Today approximately
20,000 funds exist. With all the press
and choices of the different funds, let’s begin by doing a basic overview.
There tends to be four different
categories of mutual funds. The first
and perhaps the most well-known are EQUITY FUNDS or stock funds. These are investments that invest in stocks
of companies such as GE, Bank of America, Johnson & Johnson and thousands more. In effect, you own a percantage, albeit small, of each company in the form of shares
Next we have BOND
FUNDS. A common name for this type is
Income Funds. Here you purchase a
portfolio of Bonds, which are debt obligations of different companies. They tend to be less risky than Equity funds
but still bear an investment risk. By
the way, it should be pointed out that there are NO guarantees in any mutual
funds. All variations bear some degree
of investment risk.
Next we have INTERNATIONAL FUNDS or FOREIGN FUNDS. These are
vehicles that invest in companies generally outside the United Sates. Additionally, they can contain both equity and
bond holdings.
Lastly we have ALTERNATIVE
ASSETS for a category of Mutual Funds.
In this area, you would have Gold and Precious Metal Funds, Hedge funds,
and commodity funds. Such funds tend to be the riskiest of all.
You probably realize how
important it is to read the Summary Prospectus to understand the risks of each
of these different funds. The Summary
Prospectus can be obtained by simply calling the mutual fund company. One can also access the summary prospectus on each mutual fund company’s web site. You can also contact us and we can secure any
mutual fund prospectus you desire. In closing this
article, please carefully read the current Summary Prospectus for a better understanding
of risks, fess, charges, and expenses.