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