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Personal Finance

User-Friendly Investment Advice

By Dianna Doreen
Writer, 401k Forum

Choosing mutual fund investments:
Choosing mutual fund investments carries with it many issues each with a myriad of factors to consider. Comparing mutual fund expenses involves making decisions about
  • Load or no-load
  • Performance
  • Management fees
  • Share class selection
An objective analysis by investors would include the review of
  • Risk
  • Asset class
  • Historical returns
  • Management strategy
Subjective issues mutual fund shoppers should examine before buying are
  • Personal investment goals
  • Retirement needs
  • Investment time horizon
  • Risk tolerance

The starting points for comparison shopping that are mentioned at left just begin to broach the expanse of issues related to investing. What resources do consumers have, whether they're investing for the first time or already are investment savvy? Publications that read like a favorite magazine can help investors keep abreast of current market issues and product nuances that impact their portfolio. Enjoyable ways to access investment research are always the best incentive for keeping up-to-date on your investments.

Did you know about

Investor focused tools that offer the opportunity for gaining investment knowledge include the SEC's website, and SEC Online, which uses key words and phrases to help investors search out information on SEC company filings. Another product offered by the SEC is their new Mutual Fund Cost Calculator. An independent site called "Smartinvesta" helps guide investors through SEC websites..

Gathering information on a regular basis, without having to sift through online investment news, is preferable for some investors. This can be accomplished by subscribing to anyone of a number of family-oriented investment magazines. These publications are for all types of investors and cover issues specific to a range of investor needs. Mutual Funds magazine, Money magazine, and Better Homes and Gardens' Family Money are great reads and a wealth of information. Mutual Funds and Money come out monthly, and Family Money is published every two months.

Each a consistent resource for investor research, these publications help readers learn the ins and outs of different retirement products, investment vehicles, and insurance product options. FAQs (frequently asked questions) and timely features on topics such as Y2K and online investing, as well as risk management, stock picking, and saving for retirement and college costs are regularly featured topics, presented in an unbiased and educational format.

On time, in-depth and practical

For in-depth, industry and asset class specific information, as well as features dealing with various world market issues and complex investment instruments, Barron's magazine is an enjoyable and comprehensive source of information. Its delightful editorial page bridges socioeconomic, political and Wall Street news, and contributors are well-versed in the industries they cover, asking tough questions of company and mutual fund management in interviews and reporting from an un-salesy, analytical perspective.

Many renowned publications cover the financial services and markets world. But when in need of home-grown investment information and honest advice about mutual funds, IRAs, industry-specific issues and investor profiles, user-friendly investment publications are hard to beat in terms of their usefulness to investors. With up-to-date coverage of market news, common investor questions, and reporting tax implications of various investments, these magazines do a bulk of regular research for investors. They are a first source on investment options and hot or not-so-hot mutual funds for many investors who might not have online access or a sophisticated newsstand at their corner store.

Management makes up for the prospectus

What's another good read over coffee cake and investors' kitchen tables? The best copy to read after you've taken the investment plunge: shareholder reports. The legal requirement of reading a prospectus before buying mutual fund shares may have left a bad taste in your mouth to ever read anything put out by your mutual fund company again, but the annual and semiannual resource that shareholder reports offer for news about your investment is invaluable. Usually written by fund managers and honed by a team of writers, shareholder reports arrive chock full of the story of your fund: what's affected performance, current (as of the writing of the report) and past fund holdings, and management strategy.

These reports contain information for the fund on the reported time period (every six months or every year) and are fund investors' line on why management made the decisions that affected fund holdings, and industry and asset class factors that dominated performance of the fund. Shareholder reports are a timely review of the major events pertinent to your fund, and are as important to read as monthly statements and prospectus SAI's (statements of additional information) which are updates to the fund prospectus.

Ways to plug into user-friendly investment research
  1. Subscribe to accessible, family-oriented investment magazines.
  2. Utilize free government agency research, like the SEC's website, mutual fund cost calculator and posted SEC company filings.
  3. Read shareholder reports, and SAI's (statements of additional information) for fund specific updates.
  4. Do look for magazines that offer in-depth industry coverage, and tough company and mutual fund company management interviews.
  5. Keep aware of issues that are not only central to your own personal investments but offer general financial management knowledge. Advice that encompasses everyone, such as estate planning and tax tips can benefit your personal investment situation.

User-friendly delivered

More than just a good read, shareholder reports and investment magazines can be a useful component to personal financial management. They offer a broad usefulness to consumers since they engage readers in making empowered decisions about their money, whether or not they are active investors. If you want to find out about the flexibility of your 403(b) or research the best rated and best valued universities for your kids, subscribing regularly to an accessible and family conscious money magazine can be a great investment. Investor profiles, investor question and answer sections, and letters to the editor add to the homey and accessible atmosphere of these magazines.

For general information or for news specific to your fund, straight from management, there are places investors can go directly or that come directly to their door. Keeping aware of retirement and financial market issues is not an insurmountable task. Click here for an article on managing your 401(k).

Understanding tax law changes, communicating consumer friendly, general investment advice and tips, and unraveling the complexities of retirement and investment products can be accomplished through a readable, pleasurable format. Obscure and unknown issues in the ocean of financial service information, which until user-friendly publications decipher remain only vaguely familiar, are included in these magazines along with issue-specific insight necessary to managing investments on a regular and prudent basis.

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.
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