| The dividends and interest earned by a mutual | | | | How can an individual make use of this fact? |
| fund on its investment is the income. The income | | | | Select an investment classification, e.g., Emerging |
| distribution is quarterly. When selling an investment | | | | Market. Choose one of two funds within the |
| security for a higher price than originally paid is a | | | | classification and track the daily performances. |
| gain. Selling an investment security for a lower | | | | Make use of ticker symbol. Read the prospectus |
| price than originally paid is a loss. If the investment | | | | and verify the information researched. |
| security is held by the for more than one year, | | | | Using the mutual fund ticker symbol, here are |
| the gain or loss is a "long-term" capital gain or loss. | | | | some valuable data to research: |
| If the investment security is held for less than | | | | * Profile lists the address - toll free number - |
| one year, the gain or loss is a "short-term" capital | | | | name of the Manager and tenure - inception date |
| gain or loss. Mutual funds gains and losses are | | | | - net assets - investment category - investment |
| netted together and when the fund has a net | | | | objective, etc. |
| gain, that gain is usually distributed to the | | | | * Purchase includes the minimum initial purchase - |
| shareholder once a year. | | | | minimum initial IRA purchase - maximum 12b1 fee |
| As the end of the year rapidly approaches, | | | | - maximum front end sales load - maximum |
| December is the month when many mutual funds | | | | deferred sales load - brokerage availability. |
| declare distribution of income and/or capital gains. | | | | * Performance provides the current net asset |
| There are some funds that make large (5% or | | | | value (share price) - year-to-date return - |
| more) distribution. On the trade date of dividend | | | | long-term average return - best one/three year |
| given shareholders, the share price is decreased | | | | total return - worst one/three year total return - |
| by the same amount. Example: A 10% distribution | | | | performance vs. benchmarks. |
| to its shareholders. The net asset value is reduced | | | | * Risk shows the risk rating - 3 year Alpha rating |
| 10% thereby providing an opportunity to capitalize | | | | - 3 year Beta rating - 5 year Alpha rating - 5 year |
| on the reduced share price. | | | | Beta rating - total expense ratio. |