Investing For Your Future 2:     Mutual Funds and Tax-Deferred Investments Barbara O’Neill, Ph.D., CFP®, AFC, CHC     Rutg...
Webinar Objectives• Review several basic investing concepts• Discuss mutual funds and ETFs• Discuss choosing financial adv...
Investing For Your Futurewww.investing.rutgers.edu
Categories of Investments• Ownership (Equity): Own something    –   Stocks and stock funds    –   Real estate and REITS (r...
The Risk-Reward Trade-OffSource: Garman/Forgue, PERSONAL FINANCE, Fifth Edition
Risk (Chance of Loss)• There is no such thing as a “perfect” investment  (risk-free, tax-free, high return)• All investmen...
Techniques to Offset Risk• Diversification  – Putting your money, “your eggs,” into several “baskets” (e.g.,    stocks, bo...
Investing in Mutual Funds• Mutual Fund = investment vehicle offered by  investment companies to those who wish to:  – Pool...
How a Mutual Fund WorksSource: Personal Finance (Garman & Forgue), Houghton Mifflin
Why Investors Select Mutual Funds• Professional Management   – Find out who fund manager is and years of experience• Diver...
Mutual Fund Videos• http://www.youtube.com/watch?v=fpcvJiO-rjk&feature=related (What is a Mutual Fund?)• http://www.youtub...
Net Asset Value (NAV)Current market value of assets held by a mutual fund  – Net Assets = Fund Assets - Liabilities  – NAV...
Open-End Mutual Funds• Majority of all mutual funds• Shares issued and redeemed by investment  company at request of inves...
Load vs. No-Load Mutual Funds• Front-End Load Fund   – Sometimes called an “A” fund   – Commission (sales charge) up to 8....
Load vs. No-Load Mutual Funds• Back-End Load Fund  – “B” fund  – Fee charged upon withdrawal of funds (1-5%)  – Fee genera...
Mutual Fund Expenses• Management Fee  – Charged yearly (.25%-1.5% of NAV average) based on a    percentage of assets under...
Typical Mutual Fund FeesSource: Focus on Personal Finance, McGraw-Hill (2010)
Types of Mutual Funds                       Types of                     Mutual FundsStock Funds          Bonds Funds    O...
Stock Mutual Funds                         Types of                       Mutual FundsStock Funds            Bonds Funds  ...
Bond Mutual Funds                        Types of Mutual                            Funds       Stock Funds       Bonds Fu...
Other Mutual Funds                     Types of                   Mutual Funds Stock Funds        Bonds Funds   Other Fund...
Risk and Returns on Mutual Funds   Source: Personal Finance (Garman & Forgue), Houghton Mifflin
Family of FundsOne investment company manages a group ofmutual fund portfolios– Each fund has a different financial object...
Managed Funds vs.            Index Funds• Managed Fund  fund manager makes all decisions  regarding securities in the fun...
Sources of Mutual Fund Information1.       Internet sites provide current values     –      http://finance.yahoo.com     –...
Mutual Fund ProspectusProspectus – a mutual fund’s investmentobjectives and policies must be stated inthis documentTwo Typ...
Example of a Mutual Fund Objective“The fund invests with the objective of capitalgrowth. Although income is considered in ...
Other Sources of Fund Information• Mutual Fund Annual Report  – Performance, investments, assets and liabilities• Financia...
3 Ways Money Grows With FundsIncome  – Earnings paid from dividends and interest  – Taxed as ordinary incomeCapital Gains ...
Reinvesting Fund DistributionsSource: Personal Finance (Garman & Forgue), Houghton Mifflin
Five Key Factors to Consider• Fund objective• Fees and expenses (for type of fund)• Historical performance• Investment pol...
Follow “The Rule of Three”Fund Characteristic   Fund #1   Fund #2   Fund #3ObjectivePerformanceExpense RatioRequired Depos...
Mutual Fund Record-Keeping• Most recent prospectus and annual report• Copy of original application form• Annual account st...
Mutual Fund Resources• Mutual Fund Education Alliance:  http://www.mfea.com/• Mutual Funds Resource Center:  http://www.mu...
Exchange-Traded Funds (ETFs)• Invests to replicate the composition of a specific  securities index   – Example: Standard &...
ETF Resources• http://www.sec.gov/answers/etf.htm (Securities and  Exchange Commission)• http://www.investopedia.com/terms...
Ways to Buy Investments• Through brokerage firms    – Full-service broker    – Discount broker    – Online broker• Through...
Investment Clubs• Meet regularly to learn about investing and how to  buy/sell securities• The focus is (or should be) edu...
Finding a Financial AdvisorResources:http://www.fpanet.org/PlannerSearch/PlannerSearch.aspxFinancial Planning Association ...
Costs of Financial Advice•   Fees•   Commissions•   Combination of fees and commissions•   Percentage of account value (as...
Choosing Financial Advisors• Get referrals from friends or other professionals• Check credentials and complaint history• I...
Questions for Financial Planners• How long have you been a financial  planner?• What related experience do you have?• What...
More Questions for      Financial Planners• What services do you offer?• What can I expect from you?• What will it cost an...
Taxable vs. Tax-Deferred Investing            $250,000                                                                    ...
Salary Reduction Plans401(k), 403(b), 457, and TSP• Workers elect to reduce their salary (up to maximum  amount allowed)• ...
Individual Retirement ArrangementsRegular (Traditional) IRA  – Maximum $5,500 deposit in 2013; must have earned    income ...
Individual Retirement ArrangementsRoth IRA– Maximum $5,500 deposit in 2013; must have earned income– Worker must select ow...
Individual Retirement Arrangements• Rollover IRA  – Traditional IRA allowing transfer of all, or a    portion, of distribu...
Small Business Retirement              Accounts• Simplified Employee Pension (SEP-IRA)  – Funded by freelancers and small ...
Annuities• Contract with an insurance company (check rating)• Investor makes lump sum deposit or periodic deposits• Insura...
Immediate Annuities• Purchased with lump sum of money    – Retirement account balance    – Life insurance benefit    – Set...
Deferred Annuities    Invest Now - Collect Later• Purchase Options  – Single premium (lump sum)  – Flexible payment (insta...
Risks and Benefits of AnnuitiesRisks                        Benefits• Complexity                 • Can provide• Not FDIC i...
Investing For Retirement
Retirement Withdrawal Consensus• Backed up by 2 decades of research• Withdraw 4% of retirement assets annually with  annua...
How Much Needs to be Invested?       Let’s Use Some NumbersFor every $1,000 of desired monthly income (aboveSS and/or pens...
Beware: Retirement Frauds• Walk away from solicitations that “guarantee”  consistently high returns• Don’t be rushed into ...
In Summary• Mutual funds provide professional portfolio management• Net asset value is the price to buy or sell fund share...
Action Steps• Review the format of mutual fund listings in a newspaper• Read a mutual fund prospectus• Visit one or more m...
Questions? Comments       Experiences?Please complete the webinar evaluation form
Upcoming SlideShare
Loading in...5
×

Investing for Your Future Part 2: Mutual Funds and Tax-Deferred Investments

627

Published on

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
627
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
9
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Investing for Your Future Part 2: Mutual Funds and Tax-Deferred Investments

  1. 1. Investing For Your Future 2: Mutual Funds and Tax-Deferred Investments Barbara O’Neill, Ph.D., CFP®, AFC, CHC Rutgers Cooperative Extension oneill@aesop.rutgers.edu
  2. 2. Webinar Objectives• Review several basic investing concepts• Discuss mutual funds and ETFs• Discuss choosing financial advisors• Discuss tax-deferred investment products and investing for retirement
  3. 3. Investing For Your Futurewww.investing.rutgers.edu
  4. 4. Categories of Investments• Ownership (Equity): Own something – Stocks and stock funds – Real estate and REITS (real estate investment trusts) – Collectibles – Commodities – Variable annuities• Loanership (Fixed-Income): Lend money – Bonds and bond funds – Certificates of Deposit (CDs) – Fixed annuitiesResource: http://www.extension.org/pages/39847/what-are-ownership-and-loanership-types-of-investments
  5. 5. The Risk-Reward Trade-OffSource: Garman/Forgue, PERSONAL FINANCE, Fifth Edition
  6. 6. Risk (Chance of Loss)• There is no such thing as a “perfect” investment (risk-free, tax-free, high return)• All investments have some type of risk• Risk can be caused by: – Inflation – Changes in the economy – Political uncertainty (home and/or abroad) – Business failure – Interest rate changes http://www.finra.org/Investors/SmartInvesting/AdvancedInvesting/ ManagingInvestmentRisk/
  7. 7. Techniques to Offset Risk• Diversification – Putting your money, “your eggs,” into several “baskets” (e.g., stocks, bonds, cash, real estate) – http://www.sec.gov/investor/pubs/assetallocation.htm – http://www.investopedia.com/articles/02/111502.asp#axzz1rH9rDBUo• Dollar-Cost Averaging – Investing regular amounts at regular intervals regardless of price – Examples: $50 on the 1st of every month or 6% of your gross income every payday – Lowers average share price cost over time – https://www.americancentury.com/calculator/dollar_cost_averaging_cal culator.jsp
  8. 8. Investing in Mutual Funds• Mutual Fund = investment vehicle offered by investment companies to those who wish to: – Pool money with other investors – Receive automatic diversification – Indirectly buy stocks, bonds, and other securities – Have buy/sell decisions made by fund manager• Many mutual funds are selected in retirement savings accounts
  9. 9. How a Mutual Fund WorksSource: Personal Finance (Garman & Forgue), Houghton Mifflin
  10. 10. Why Investors Select Mutual Funds• Professional Management – Find out who fund manager is and years of experience• Diversification – Investor’s funds are used to purchase a variety of investments (shares of many different companies)• Low Cost – Often $1,000 or less to open account; $100 for depositsBiggest Disadvantages: No control over fund distributionsand taxes and no guarantee against market losses Resource: http://www.investopedia.com/ask/answers/10/mutual-funds- advantages-disadvantages.asp#axzz1uJ6PEFFD
  11. 11. Mutual Fund Videos• http://www.youtube.com/watch?v=fpcvJiO-rjk&feature=related (What is a Mutual Fund?)• http://www.youtube.com/watch?v=v8tK6LuOP3E&feature=topics(How Mutual Funds Work)
  12. 12. Net Asset Value (NAV)Current market value of assets held by a mutual fund – Net Assets = Fund Assets - Liabilities – NAV (price per share) is calculated at the close of trading • Net assets divided by number of outstanding shares – Determines price for purchase and sale of fund shares Example: $52,500,000 value of fund net assets 3,500,000 number of shares = $15 per share
  13. 13. Open-End Mutual Funds• Majority of all mutual funds• Shares issued and redeemed by investment company at request of investors• Investors free to buy and sell shares at net asset value (NAV)• No broker or stock exchange required• Wide variety of services • Automatic deposits and withdrawals • Exchanges among family of fundsResource: http://www.investopedia.com/exam-guide/cfa-level-1/alternative- investments/open-closed-end-funds.asp#axzz1uJ6PEFFD
  14. 14. Load vs. No-Load Mutual Funds• Front-End Load Fund – Sometimes called an “A” fund – Commission (sales charge) up to 8.5% • Average = 3 to 5% – Purchased through brokerage firms or registered representatives• No-Load Fund – No up-front sales charge – No salespeople – Investor deals directly with the investment company via 800 number or Web site Resource: http://finance.yahoo.com/funds/how_to_choose/article/10 0601/Load_vs__No-Load_Funds
  15. 15. Load vs. No-Load Mutual Funds• Back-End Load Fund – “B” fund – Fee charged upon withdrawal of funds (1-5%) – Fee generally decreases on a sliding scale depending on number of years shares are held • Fee disappears after about 5-6 years • Knowing your holding period is key factor Resource: http://www.morningstar.com/InvGlossary/back_end_load _definition_what_is.aspx
  16. 16. Mutual Fund Expenses• Management Fee – Charged yearly (.25%-1.5% of NAV average) based on a percentage of assets under management (AUM)• 12b-1 Fee – Fee to defray advertising and marketing costs – Cannot exceed 1% of AUM per year• Expense Ratio – Total expenses associated with management fees and operating costs of the fund Resource: http://www.sec.gov/answers/mffees.htm
  17. 17. Typical Mutual Fund FeesSource: Focus on Personal Finance, McGraw-Hill (2010)
  18. 18. Types of Mutual Funds Types of Mutual FundsStock Funds Bonds Funds Other FundsSource: Focus onPersonal Finance,McGraw-Hill (2010)
  19. 19. Stock Mutual Funds Types of Mutual FundsStock Funds Bonds Funds Other FundsAggressive Growth Price growth vs. Growth Dividend Income Equity income Small-cap Mid-cap Company Size Large-cap Global Source: Focus on % U.S. vs. Personal Finance, Regional International International McGraw-Hill (2010) Index funds Match index holdings Sector funds Economic Sectors Invest in sociallySocially responsible responsible firms
  20. 20. Bond Mutual Funds Types of Mutual Funds Stock Funds Bonds Funds Other Funds High-yield IntermediateSource: Focus on Corporate bondsPersonal Finance, Intermediate U.S.McGraw-Hill (2010) Govt bonds Long-term corporate bonds Long-term U.S. govt bonds Municipal bonds Short-term corporate bonds Short-term U.S.govt bonds
  21. 21. Other Mutual Funds Types of Mutual Funds Stock Funds Bonds Funds Other Funds Asset Allocation Funds Balanced Funds Fund of Funds Lifecycle FundsSource: Focus on Personal Money Market FundsFinance, McGraw-Hill (2010)
  22. 22. Risk and Returns on Mutual Funds Source: Personal Finance (Garman & Forgue), Houghton Mifflin
  23. 23. Family of FundsOne investment company manages a group ofmutual fund portfolios– Each fund has a different financial objective– Exchange privileges allow movement from one fund to another within the family with low or no charge– Listed alphabetically in newspapers Names of popular investment companies?
  24. 24. Managed Funds vs. Index Funds• Managed Fund  fund manager makes all decisions regarding securities in the fund’s portfolio• Index Fund  securities held by the fund replicate those contained in a specific index like the Standard & Poor’s (S&P) 500Resources:http://abcnews.go.com/Business/PersonalFinance/index-funds-actively-managed-funds-best/story?id=8866429http://money.cnn.com/2007/06/11/pf/expert/expert.moneymag/index.htm
  25. 25. Sources of Mutual Fund Information1. Internet sites provide current values – http://finance.yahoo.com – www.morningstar.com – www.smartmoney.com2. Mutual fund companies’ Internet sites – www.troweprice.com – www.vanguard.com3. Professional Advisory Services – Lipper Analytical Services – Morningstar, Inc. – Value Line4. Financial advisors (stock broker, financial planner, etc.)
  26. 26. Mutual Fund ProspectusProspectus – a mutual fund’s investmentobjectives and policies must be stated inthis documentTwo Types:• Traditional prospectus (long)• Profile prospectus (short)Resource:http://www.sec.gov/answers/mfprospectustips.htm
  27. 27. Example of a Mutual Fund Objective“The fund invests with the objective of capitalgrowth. Although income is considered in theselection of securities, the Fund is notdesigned for investors seeking primarilyincome rather than capital appreciation.”
  28. 28. Other Sources of Fund Information• Mutual Fund Annual Report – Performance, investments, assets and liabilities• Financial Publications – Business Week, Forbes, Kiplingers Personal Finance, WSJ, Consumer Reports, and Money• U.S. Securities and Exchange Commission (An Introduction to Mutual Funds): http://www.sec.gov/investor/pubs/inwsmf.htm
  29. 29. 3 Ways Money Grows With FundsIncome – Earnings paid from dividends and interest – Taxed as ordinary incomeCapital Gains Distributions – Distributions when the fund buys and sells securities – Taxed as long-term gainsCapital Gains (or Losses) – Capital gains (or losses) when an investor sells shares at a different price than price originally paid – Taxed as short- or long-term gains
  30. 30. Reinvesting Fund DistributionsSource: Personal Finance (Garman & Forgue), Houghton Mifflin
  31. 31. Five Key Factors to Consider• Fund objective• Fees and expenses (for type of fund)• Historical performance• Investment policies relative to personal risk tolerance• Minimum initial and subsequent depositsResource: http://articles.marketwatch.com/2007-08-26/finance/30744309_1_style-and-discipline-funds-with-sales-charges-mutual-funds
  32. 32. Follow “The Rule of Three”Fund Characteristic Fund #1 Fund #2 Fund #3ObjectivePerformanceExpense RatioRequired DepositInvestment Policies
  33. 33. Mutual Fund Record-Keeping• Most recent prospectus and annual report• Copy of original application form• Annual account statements – For as long as you hold investment + 6 years• Articles about the fund, manager, etc.Resource:http://www.nytimes.com/2011/01/09/business/mutfund/09record.html
  34. 34. Mutual Fund Resources• Mutual Fund Education Alliance: http://www.mfea.com/• Mutual Funds Resource Center: http://www.mutualfundsresource.com/• Investment Company Institute: http://www.ici.org/• Finish Rich (Author David Bach): http://www.finishrich.com/free_resources/fr_mutualfunds.php
  35. 35. Exchange-Traded Funds (ETFs)• Invests to replicate the composition of a specific securities index – Example: Standard & Poor’s 500 Index• Performance mirrors index performance• Low management fees• Trade on exchanges throughout the day like stock• Prices determined by supply and demand• Can be traded with limit orders
  36. 36. ETF Resources• http://www.sec.gov/answers/etf.htm (Securities and Exchange Commission)• http://www.investopedia.com/terms/e/etf.asp#axzz1uJ6PEFF D (Investopedia)• http://www.extension.org/pages/63274/monthly-investment- message:-march-2012 (eXtension)• http://www.dummies.com/how-to/content/how-etfs-differ- from-mutual-funds.html (Investing for Dummies book)• http://www.ici.org/etf_resources (Investment Company Institute)
  37. 37. Ways to Buy Investments• Through brokerage firms – Full-service broker – Discount broker – Online broker• Through banks and their bank-affiliated partners• Directly from a company that issues themResources:http://www.investopedia.com/articles/basics/03/051603.asp#axzz1uNbWsmWKhttp://beginnersinvest.about.com/cs/brokers1/a/042501a.htm
  38. 38. Investment Clubs• Meet regularly to learn about investing and how to buy/sell securities• The focus is (or should be) education• Typically 10 to 15 members that form a partnership• Big drop-off in membership in recent yearsResources:http://www.nolo.com/legal-encyclopedia/joining-investment-club-30224.htmlhttp://www.betterinvesting.org
  39. 39. Finding a Financial AdvisorResources:http://www.fpanet.org/PlannerSearch/PlannerSearch.aspxFinancial Planning Association (FPA)http://www.napfa.org/National Association of Personal Financial Advisors (NAPFA)http://www.cfp.net/Certified Financial Planner Board of Standards, Inc.http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/FINRA Broker Check
  40. 40. Costs of Financial Advice• Fees• Commissions• Combination of fees and commissions• Percentage of account value (assets under management)• Hourly rate• Annual retainer feeResource:http://moneyover55.about.com/od/findingqualifiedadvisors/a/sixfinancialplannerfees.htm
  41. 41. Choosing Financial Advisors• Get referrals from friends or other professionals• Check credentials and complaint history• Interview at least three professionals• Check out references• Set up face-to-face meetings• Ask questions• Ask yourself “Do I trust this person?”• Make a decision
  42. 42. Questions for Financial Planners• How long have you been a financial planner?• What related experience do you have?• What are your professional credentials and affiliations?• What is your investment philosophy?• How will we work together?
  43. 43. More Questions for Financial Planners• What services do you offer?• What can I expect from you?• What will it cost and how are you paid?• Who will work with me?• May I see a sample financial plan?• Are you registered with state or federal regulators?
  44. 44. Taxable vs. Tax-Deferred Investing $250,000 244,700 $200,000 $150,000 160,300 157,900 $100,000 112,200 98,800 27,600 31,300 75,800 $50,000 58,600 48,300 $0 10yrs 15yrs 20yrs 25yrs 30yrs Taxable Returns (at 28%) Garman/Forgue, PERSONAL FINANCE, Fifth Edition, Tax- Sheltered Returns are Greater than Taxable Returns Tax-Deferred Returns (Illustration: 8% Annual Return and $2,000 Annual Contribution) Calculator: http://www.calcxml.com/do/inv07
  45. 45. Salary Reduction Plans401(k), 403(b), 457, and TSP• Workers elect to reduce their salary (up to maximum amount allowed)• Employee contributions are tax-deferred• Some employers match a portion of workers’ contribution• Funds invested in stocks, bonds, mutual funds, etc. offered by planResource:http://www.irs.gov/retirement/sponsor/article/0,,id=155347,00.html
  46. 46. Individual Retirement ArrangementsRegular (Traditional) IRA – Maximum $5,500 deposit in 2013; must have earned income ($6,500 if age 50+ with $1,000 catch up) – Worker must select own IRA investment products – Contribution may be tax-deductible, depending on tax filing status and income – Interest accumulates tax-deferred until withdrawal – May begin withdrawing (penalty-free) at 59 ½ – Must begin withdrawing at 70 ½ – Withdrawals are taxable income
  47. 47. Individual Retirement ArrangementsRoth IRA– Maximum $5,500 deposit in 2013; must have earned income– Worker must select own IRA investment products– Contributions are not tax deductible– Maximum income limits for eligibility to make contributions– Withdrawals are tax-free and penalty-free, if: » You are at least age 59 ½ » Account is open at least 5 years– Can convert a Regular IRA into a Roth IRA; must pay taxes due
  48. 48. Individual Retirement Arrangements• Rollover IRA – Traditional IRA allowing transfer of all, or a portion, of distribution from an employer retirement plan or other IRA• Spousal IRA – Contributions for a nonworking spouse if filing a joint return – Same contribution limits as workers’ Roth or Traditional IRAs
  49. 49. Small Business Retirement Accounts• Simplified Employee Pension (SEP-IRA) – Funded by freelancers and small business owners – Annual contributions up to $51,000 (2013) – Simplest retirement plan for the self-employed• SIMPLE Plans – $12,000 worker contribution + $2,500 catch-up (2013)• Keogh Plans – Annual contributions up to $51,000 (2013) – Most difficult small business plan to administer
  50. 50. Annuities• Contract with an insurance company (check rating)• Investor makes lump sum deposit or periodic deposits• Insurance company provides payments for life or a fixed period• Sold by many types of financial professionals• Purchased with after-tax dollars• Money compounds tax-deferredResources:http://www.actuarialfoundation.org/programs/investing.shtmlhttp://www.sec.gov/answers/annuity.htmhttp://www.moneychimp.com/calculator/annuity_calculator.htm
  51. 51. Immediate Annuities• Purchased with lump sum of money – Retirement account balance – Life insurance benefit – Settlement• Provides fixed income starting soon after purchase• In return for lump sum, annuity guarantees fixed income for life or specified period (depending on payment option)Resource:http://www.extension.org/pages/9662/investing-unit-7:-annuities
  52. 52. Deferred Annuities Invest Now - Collect Later• Purchase Options – Single premium (lump sum) – Flexible payment (installment payments over time)• Two Types – Fixed - earns an interest rate established for a set time • Like a tax-deferred CD – Variable - earnings dependent on selected investments called subaccounts (e.g., stock) • Like tax-deferred mutual funds
  53. 53. Risks and Benefits of AnnuitiesRisks Benefits• Complexity • Can provide• Not FDIC insured guaranteed income• High surrender charges for life• High expenses on • Tax-deferred growth average of principal• Age restriction for • Some low-cost penalty-free withdrawals providers exist• Financial soundness of annuity issuer
  54. 54. Investing For Retirement
  55. 55. Retirement Withdrawal Consensus• Backed up by 2 decades of research• Withdraw 4% of retirement assets annually with annual inflation adjustment• High probability of money lasting 30 years• Example: $200,ooo of savings – $8,000 in year 1 ($200,000 x .04) – $8,240 in year 2 ($8,000 + $8,000 x .03 [$240])• Assumes that 50% of portfolio is in stock• More conservative investors should withdraw less (e.g. 3%)
  56. 56. How Much Needs to be Invested? Let’s Use Some NumbersFor every $1,000 of desired monthly income (aboveSS and/or pension), you need $300,000 saved – $300,000 x .04 = $12,000 – $12,000 ÷ 12 = $1,000• $2,000/month = $600,000• $3,000/month = $900,000• $4,000/month = $1.2 million• $5,000/month = $1.5 million
  57. 57. Beware: Retirement Frauds• Walk away from solicitations that “guarantee” consistently high returns• Don’t be rushed into legal or investment decisions• AARP study: “At risk” activities” associated with investment fraud – Opening and reading junk mail – Attending free lunch seminars – Entering drawings to win a free prize – Inviting salespeople into your home
  58. 58. In Summary• Mutual funds provide professional portfolio management• Net asset value is the price to buy or sell fund shares• All mutual funds have fees; the lower, the better• A prospectus is a key mutual fund screening tool• Follow the “Rule of Three” to select funds, advisors, etc.• ETFs are a hybrid between stocks and index funds• Annuities provide regular income for a specified period• Retirement savings can be calculated and planned
  59. 59. Action Steps• Review the format of mutual fund listings in a newspaper• Read a mutual fund prospectus• Visit one or more mutual fund company Web sites• Explore one or more sources of investment information• Explore one or more sources of mutual fund information• Investigate investment choices in employer retirement plan• Start or increase retirement plan savings
  60. 60. Questions? Comments Experiences?Please complete the webinar evaluation form
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×