Money Matters
A fund manager is hired a normal mutual fund shares. No-load funds
to invest the cash the in- and are therefore, sub- tend to generate higher
vestors have contributed. jected to the laws of sup- returns for investors due
The manager’s goal de- ply and demand. As a to the lower expenses
pends upon the type of result, shares of closed- associated with owner-
fund. A fixed-income fund end funds normally trade ship.
manager, for example, at a discount to net asset
Since every fund has
would strive to provide value.
its own investing strategy,
the highest yield at the
Conversely, the ma- style or purpose, you’ll
lowest risk. A long-term
jority of mutual funds are have to align yourself
growth manager, on the
open-ended. In simple with what’s most com-
other hand, should at-
terms, this means that fortable for you. Some,
tempt to beat the Dow
the fund does not have a for instance, invest only
Jones Industrial Average
set number of shares. In- in blue chip companies
or the S&P 500 in a fiscal
stead, the fund will issue while others invest in
year though it less likely
new shares to an inves- start-ups or specific sec-
a fund will achieve this
tor based upon the cur- tors. Finding a mutual
goal.
rent net asset value and fund that fits your invest-
Mutual funds are di- redeem the shares when ment criteria and style is
vided along four lines: the investor decides to absolutely vital; you must
closed-end and open- sell. Open-end funds al- know and understand
ended funds. The latter is ways reflect the net as- your investment.
subdivided into load and set value of the fund’s
After you’ve settled
no load. underlying investments
Mutual fund investing
upon a type of fund, turn

Closed-end funds
because shares are cre-
to Morningstar or Stan-
have a set number of
ated and destroyed as
dard and Poors (S&P).
shares issued to the
necessary.
Both of these compa-
Smart move or bad decision?
public through an initial Keeping in mind that nies issue fund rankings
public offering that are if a fund charges a load based on past record.
By F. Carlton Peeples tual funds. provided
UNI_CBP-1419-COdream-Sbus.pdf 1 4/7/09 9:27 AM
by individual
traded on the open mar- (sales commission), the Remember also that past
investor will pay on top of success is no indication
Owning stock through Here are a few re-
investors, companies
ket. They don’t redeem
the net asset value of the of the future.
mutual funds is not only sources that should bet-
and other organizations.
or issue new shares like
attractive, it’s also one of ter prepare and help you
the most popular forms of understand the world of
personal investment. mutual fund investing.
Statistically people A product of Wall
are less likely to own Street, mutual funds are
individual investments touted as the easiest,
than they are shares of least stressful way to
companies through mu- put money in the mar-
tual funds. Be it through ket. More new money
a 401(k) or Roth IRA, has been introduced into
many of us feel safe funds over the past few
and responsible and as years than at any time
though we‘ve put a little in history. So before in-
something away for rainy vesting you should know
C
days. Though offering how they work, the ins
many benefits, there are and outs of investing and M
some drawbacks and what mutual funds are.
possible tax implications
Y
Simply put, a mutual
for investing through mu-
fund is a pool of money
CM
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aw Office Of
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carOLyn J. JacksOn
CMY
• Divorce • Criminal Non-Support
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6 The Michigan FrontPage • December 4, 2009
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