All about Mutual Funds : From the Inside Out

by Jacobs, Bruce

• ISBN13: 9780071376785
• ISBN10: 007137678X
• Edition: 2nd
• Format: Paperback
• Copyright: 2001-11-01
• Publisher: MCG (Manual)

Summary

Mutual funds have become the vehicle of choice for independent investors, and All About Mutual Funds, Second Edition, supplies the proven methods and practical tips needed to make the right choice every time. This updated, expanded edition adds new information to virtually every chapter, covering the latest types of funds, revised tax strategies, and nine steps to building a winning mutual fund portfolio. In addition, an entirely new chapter explains how to use the Internet to find timely information, save time and money by investing on-line, and more.

Table of Contents

Preface	xv
Introduction	xvii
Mutual Fund Questionnaire	xvii
Figures Don't Lie	xxi
Americans Need Financial Lessons	xxii
What Are Mutual Funds?	1	(9)
Definition	1	(1)
History	2	(1)
The Current Industry	3	(1)
How to Select a Mutual Fund	4	(1)
Study Guide for Chapter 1	5	(5)
The NAV Analyzed	6	(2)
Mutual Funds Now Top Bank Savings	8	(1)
Growth of the Mutual Fund Industry	9	(1)
Mutual Fund Classifications	10	(7)
Open-end Funds	10	(1)
Closed-end Funds	11	(1)
Six Reasons for Fluctuations in Net Asset Value	12	(1)
Effect of Distributions on a Fund's NAV	12	(1)
Study Guide for Chapter 2	13	(4)
The ``X'' Dividend Effect on a Fund's NAV	14	(2)
Effect of Purchasing and Redeeming Shares on Fund's NAV	16	(1)
Types of Mutual Funds	17	(21)
Money Market Funds	17	(3)
Income Funds	20	(1)
Income and Growth Funds	21	(1)
Growth and Income Funds	21	(1)
Balanced Funds	21	(1)
Growth Funds	22	(1)
Index Funds	22	(1)
Sector Funds	23	(1)
Specialized Funds	24	(1)
International Funds	24	(1)
Tax-Free Funds	24	(3)
Stock Market Indices	27	(3)
Study Guide for Chapter 3	30	(8)
How to Deal with Gyrating Stock Market Indices	31	(1)
Understanding the Dow Jones Industrial Average Index	32	(2)
Ten Reasons to Index	34	(3)
Need Tax Relief? Try Munis	37	(1)
Load Versus No-Load Mutual Funds	38	(9)
What Are Load Funds?	38	(1)
What Are No-Load Funds?	38	(1)
Which Should You Choose?	39	(1)
Study Guide for Chapter 4	40	(7)
No-Load Mutual Funds vs. Bank CDs	42	(2)
Load Funds vs. No-Load Funds	44	(1)
Calculating a Fund's Load Using Mutual Fund Listings	45	(2)
Advantages of Mutual Fund Investing	47	(10)
Portfolio Diversification	47	(2)
Professional Management	49	(1)
Reduction of Risk	49	(1)
Reduction of Transaction Costs	50	(5)
Study Guide for Chapter 5	55	(2)
Do You Buy Lottery Tickets?	56	(1)
Risks in Mutual Fund Investing	57	(10)
Low-Level Risks	57	(1)
Moderate-Level Risks	58	(1)
High-Level Risks	58	(1)
Measuring Risk	58	(3)
Find your Risk Tolerance Level	61	(1)
Study Guide for Chapter 6	62	(5)
Risk Tolerance Quiz	63	(1)
Risk vs. Reward	64	(1)
Risk Control Techniques	65	(1)
Market Timing: Should your or Shouldn't You?	66	(1)
Investment Companies	67	(9)
Concept and Definition	67	(1)
Examples in Today's Market	68	(2)
Study Guide for Chapter 7	70	(6)
The Prospectus	76	(9)
Information Contained in a Prospectus	76	(1)
Why is a Prospectus Necessary?	77	(1)
How to Obtain a Prospectus	78	(1)
Calculating a Fund's Return or Yield	79	(3)
Study Guide for Chapter 8	82	(3)
Profile Prospectus Debuts	83	(1)
Calculating the ROI	84	(1)
How to Open a Mutual Fund Account	85	(7)
Initial Contacts-Surveying the Market	85	(2)
Opening an Account-Application Preparation	87	(3)
Study Guide for Chapter 9	90	(2)
Instructions for Opening an Individual Retirement Account	91	(1)
Registering a Mutual Fund Account	92	(8)
Individual Ownership	92	(1)
Joint Account	92	(1)
Joint Account with Rights of Survivorship	93	(1)
Trusts	93	(1)
Study Guide for Chapter 10	93	(7)
What's in a Name: Registering an Account	96	(2)
Details of Various Types of Mutual Fund Registrations	98	(2)
Making Subsequent Investment Purchases	100	(7)
Amount Required for Additional Purchases	100	(1)
By Mail	101	(3)
By Wire	104	(1)
Automatic Purchase Option	104	(1)
Study Guide for Chapter 11	105	(2)
The Most Important Investment Principle of All	106	(1)
Strategies to Maximize Return on Investment	107	(15)
Buy and Hold	107	(1)
Dollar-Cost Averaging	107	(2)
Value Averaging	109	(1)
The Combined Method	110	(1)
Telephone Switching	110	(1)
Cash Benefits of Dollar-Cost Averaging	111	(1)
Study Guide for Chapter 12	112	(10)
What Is Dollar-Cost Averaging?	114	(2)
Sell? Hold? Buy?	116	(1)
Dollar-Cost Averaging Budget Plan	117	(1)
Value Averaging vs. Dollar-Cost Averaging	118	(2)
Portfolio Management Techniques	120	(2)
Tracking a Fund's Performance	122	(18)
Daily Newspapers	122	(1)
Financial Magazines	123	(1)
Toll-Free Calls	123	(2)
Annual, Semiannual, and Quarterly Reports	125	(6)
Study Guide for Chapter 13	131	(9)
Focus on the Long Term	132	(1)
Ten Reasons to Sell Your Mutual Fund	133	(3)
Seven Questions to Ask Before Selling a Fund	136	(1)
When to Sell or Switch Guide	137	(1)
How to Read Mutual Fund Listings in Daily Newspapers	138	(1)
Reading a Mutual Fund's Annual Report	139	(1)
Services Provided by Mutual Fund Companies	140	(16)
Accumulation Plans	140	(6)
Check Writing	146	(1)
Switching Within a Family of Funds	146	(2)
Voluntary Withdrawal Plans	148	(1)
Redeeming Shares	149	(1)
Study Guide for Chapter 14	150	(6)
Utilizing Special Mutual Fund Services	151	(2)
Early Start IRA: How $6,750 Grows to Over $1 Million	153	(1)
IRA Choices	154	(1)
Questions and Answers about Roth IRAs	155	(1)
Costs of Ownership	156	(10)
Management Fees	156	(2)
Redemption Fees	158	(1)
12b-1 Fees	159	(1)
Switching Fees	159	(1)
Maintenance Fees	160	(1)
Study Guide for Chapter 15	161	(5)
How Fund Expenses Affect Returns	163	(1)
Tips for Selecting a Mutual Fund	164	(2)
Tax Issues	166	(17)
IRS 1099 Forms	166	(3)
Tax Relief with Tax-Free Mutual Funds	169	(3)
Study Guide for Chapter 16	172	(11)
Year-End Tax Forms Schedule	174	(1)
Federal Income Tax Changes Approved	175	(2)
Cutting Your Capital Gains Tax	177	(1)
Capital Gains Tax Addendum	178	(1)
Three Methods of Calculating Capital Gains Taxes	179	(1)
Don't ``Buy'' a Dividend	180	(2)
Turning Mutual Fund Losses into Tax Breaks	182	(1)
Developing a Model Portfolio	183	(9)
Four-Step Program	183	(1)
Making Adjustments	184	(1)
Implementation	184	(3)
Study Guide for Chapter 17	187	(5)
How to Build a Winning Portfolio	188	(2)
Trying to Time the Market	190	(2)
Is Mutual Fund Investing for Me?	192	(11)
Summing Up	192	(3)
Study Guide for Chapter 18	195	(8)
Investing Rule	197	(1)
My Personal Philosophy Regarding Investing	198	(1)
Serious Investment Errors You Can't Afford to Make	199	(1)
What Is the Most Important Factor for Financial Success?	200	(1)
Roth's Rules Regarding Risk	201	(1)
The Heart of the Book	202	(1)
Mutual Fund Investing via the Internet	203	(5)
The Dot.Com Revolution	206	(2)
Epilogue	208	(9)
A Review	208	(4)
Five Major Mistakes	212	(2)
Study Guide for the Epilogue	214	(3)
Appendix A Non-Technical Magazines and Newspapers	217	(1)
Appendix B Mutual Fund Listings in Newspapers	218	(4)
Appendix C Addresses and Toll-Free Telephone Numbers of Selected Funds	222	(3)
Appendix D The Miracle of Compounding	225	(2)
Appendix E Calculating Return on Investment	227	(4)
Bibliography	231	(2)
Glossary of Mutual Fund Terms	233	(8)
Index	241	(16)
About The Author	257