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All About Mutual Funds Allen Holdsworth BIVA Director Illowa Buy States Chapter Nov. 11, 2014.

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Presentation on theme: "All About Mutual Funds Allen Holdsworth BIVA Director Illowa Buy States Chapter Nov. 11, 2014."— Presentation transcript:

1 All About Mutual Funds Allen Holdsworth BIVA Director Illowa Buy States Chapter Nov. 11, 2014

2 Better Investing Disclaimer The information in this presentation is for educational purposes only and is not intended to be a recommendation to purchase or sell any of the stocks, mutual funds, or other securities that may be referenced. The securities of companies referenced or featured in the seminar materials are for illustrative purposes only and are not to be considered endorsed or recommended for purchase or sale by BetterInvesting™ National Association of Investors Corporation (“BI”) or the National Investors Association, its volunteer advisory board (“BIVAB”). The views expressed are those of the instructors, commentators, guests and participants, as the case may be, and do not necessarily represent those of BetterInvesting™ orBIVAB. Investors should conduct their own review and analysis of any company of interest before making an investment decision. Securities discussed may be held by the instructors in their own personal portfolios or in those of their clients. BI presenters and volunteers are held to a strict code of conduct that precludes benefiting financially from educational presentations or public activities via any BetterInvesting programs, events and/or educational sessions in which they participate. Any violation is strictly prohibited and should be reported to the President of BetterInvesting or the Manager of Volunteer Relations. 2

3 Better Investing Investor Beware! Allen Holdsworth MAD Investment Club-18 yrs. Illowa Buy States Chapter Director- 17 yrs. BIVA Board Director- 9 yrs. Taught classes in 30+ states 3

4 Better Investing Mutual Funds Financial Advisor/stockbroker 7 yrs 350+ clients Retired Dec. 2007 Teach “Personal Investing” class at BHC 4

5 Better Investing Personal Story One lady said she was not worried about the stock market. She did not own any stocks She was in mutual funds!?!? There are a LOT of people out there who need help!!

6 Better Investing Mutual Funds 6 Invest in: Stocks Corporate bonds Municipal bonds Preferred stocks Mutual funds

7 Better Investing 7 Here ’ s how some of the financial asset classes stack up. All asset classes begin in 1925 with a value of $1.00.

8 Better Investing 8 10-Year Blocks of Time There are only two negative numbers on this chart! 2009 NEGATIVE RETURN POSITIVE RETURN 2010

9 Better Investing Mutual Funds  Your money is pooled with other investors…you become a shareholder  The fund is managed by a professional or team of professionals…who make ALL portfolio investment decisions for you  Your shares (net asset value) increase or decrease in value based on the investments the manager(s) makes

10 Better Investing  Diversification (Most important)  Liquidity  Concise Information (SEC)  Professional Management  Convenience  Selection (Limitless) Advantages of mutual Funds

11 Better Investing Mutual Funds Thousands of mutual funds 401k may have 10 to 30 funds What to study or compare? 11

12 Better Investing What Should We Look For? Investing Style Performance Fees Manager 12

13 Better Investing What Should We Look For? Number of Holdings Active or Passive Mgmt. Load or No-load Turnover % 13

14 Better Investing Investing Style

15 Better Investing Investing Style For long term MIGHT use the following: 20% large cap 20% mid cap 20% small cap 20% international 20% bonds

16 Better Investing Mutual Fund Performance 1 year, 3 year and 5 year data Fund vs. index 80% of funds don’t beat their index 16

17 Better Investing Fees and Expenses Costs do matter Less is better 17

18 Better Investing Expenses do matter!!! All track the S&P 500 GRAMX 5.75% load.52% exp. PLSAX 1.5% load.79% exp. AAFPX no load.60% exp. SWPPX no load.09% exp. IVV ETF.09% exp. SPY ETF.1% exp. 18

19 Better Investing Fund Manager How long has he been there? 19

20 Better Investing Number of Holdings Fewer better than more Is it a closet index fund? Some funds have over 500 holdings 20

21 Better Investing Turnover % More turnover = more taxes Look for turnover less than 50% Index funds have VERY low turnover 21

22 Better Investing Type of management Active 22 Passive (index)

23 Better Investing Active Mgmt. Higher costs Higher turnover in many cases Often higher taxes 23

24 Better Investing Passive mgmt. Lower costs Lower turnover Lower taxes 24

25 Better Investing Questions? Contact Allen Holdsworth at 754-8870

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