| You are invested in Individual | | | | is the fund's total annual operating |
| Retirement Account (IRA) certificates of | | | | expenses which includes management fees, |
| deposits and bonds for your retirement. | | | | distribution (12b-1) fees, and other |
| These are excellent investments; but you | | | | expenses is expressed as a percentage of |
| do not want all of your IRA investments | | | | average net assets. |
| in just these type of savings because | | | | On September 15, 2006, $10,000 was |
| you can get locked in with low annual | | | | hypothetically invested among four |
| percentage yields. | | | | mutual funds that fill the above |
| You want a much larger annual return on | | | | qualifications. Here are the current |
| your investment but with low risk. Your | | | | results. |
| goal is to maintain a comfortable life | | | | Investment as of September 15, 2006: |
| style whether the market goes up or the | | | | • $2,000.00 (114.92 shares) Balanced |
| market goes down. | | | | • $2,500.00 (89.22 shares) Equity |
| A excellent IRA investment option is a | | | | Income |
| Mutual Fund - the common name for an | | | | • $2,500.00 (139.60 shares) Multi-Cap |
| open-end investment company. Like other | | | | Core |
| types of investment companies, mutual | | | | • $3,000.00 (20.19 shares) |
| funds pool money from many investors and | | | | Speciality: Health |
| invest the money in stocks, bonds, | | | | • $9,843.08 (actual total investment |
| short-term money-market instruments, or | | | | -1.56%) shares purchased after initial |
| other securities. Mutual funds issue | | | | fees |
| redeemable shares that investors | | | | As of May 11, 2007, the total return on |
| purchase directly from the fund or | | | | these funds is $11,201.51 11.20%. The |
| through a broker for the fund. | | | | combined total return includes income |
| Including an IRA investment as part of | | | | and capital gains that were distributed |
| your portfolio, you want a mutual fund | | | | by these mutual funds. If the |
| to meet certain conditions such as: | | | | distribution was not made and not |
| 1) Return over long-term (5 years) | | | | reinvested, the total return would be |
| should be above the average CD yields. | | | | $10,595.56 5.96%. |
| An example would be a mutual fund that | | | | Mutual funds are not guaranteed or |
| provided an 8% average for 2002 through | | | | insured by the FDIC or any other |
| 2006. There is no guarantee of past | | | | government agency - even if you buy |
| performance but it can help you assess | | | | through a bank and the fund carries the |
| the fund's fluctuation. | | | | bank's name. There is no guarantee of |
| 2) Risk should be minimal. The risk | | | | past performance and always contact the |
| ratings of mutual funds range from low | | | | mutual fund and read the prospectus |
| to high. Risk is a standard deviation of | | | | before making an investment. |
| the return on total investment. | | | | Mutual Interest Data Service was |
| 3) Distribution of income and/or capital | | | | created September 26, 1999. The |
| gains that the mutual fund gives its | | | | objective is to be an exclusive resource |
| shareholders should be large. All | | | | based on finding top mutual funds that |
| distribution should be reinvested which | | | | 1) distribute large income/capital gains |
| increases the number of shares owned. | | | | and 2) maintain performance growth for a |
| Taking this action allows you not to be | | | | 5 year period. To validate this niche, |
| taxed for the income or capital gains | | | | the above mutual funds model was |
| received. You acquire additional shares | | | | created. You can see the actual |
| of the mutual fund at a lower net asset | | | | distribution and reinvestment for these |
| value price because the share price is | | | | investments at |
| reduced by the amount of distribution. | | | | This article is free for republishing |
| 4) Total Expense ratio should be low or | | | | Source: |
| should not exceed the average of other | | | | Occupation: Founder of Mutual Interest |
| mutual funds serving the same investment | | | | Data Service, Ltd. |
| classification. The total expense ratio | | | | |