1. Getting Morningstar Free From the SD County Library

2. Morningstar Regular edition available on line @ www.morningstar.com with limited capability. Regular edition available on line @ www.morningstar.com with limited capability. www.morningstar.com Premium edition available @ above site for $19.95/month. Premium edition available @ above site for $19.95/month. We’ll focus on a free edition available thru the San Diego County Library @ www.sdcl.org. We’ll focus on a free edition available thru the San Diego County Library @ www.sdcl.org. www.sdcl.org

3. Navigating to site You will need a San Diego County Library Card number and pin to use the web site. You will need a San Diego County Library Card number and pin to use the web site. Enter http://www.sdcl.org into the address line on your browser. Enter http://www.sdcl.org into the address line on your browser. Click on databases, then business and investing, then Morningstar from library branch. Click on databases, then business and investing, then Morningstar from library branch. Fill in your library card number and pin then click submit. Fill in your library card number and pin then click submit.

4. Navigating in the site. From the Morningstar (mst) web site home page, enter VFINX (any mutual fund ticker will do) in the “Reports” line. From the Morningstar (mst) web site home page, enter VFINX (any mutual fund ticker will do) in the “Reports” line. A new page with the quote will appear. A new page with the quote will appear. Explore the page by reading each of the pages under the blue bar in the left margin of this page. Explore the page by reading each of the pages under the blue bar in the left margin of this page.

5. Note Especially! Purchase information. Purchase information. –open to new investors??? Stewardship Rating. See $ manager’s own money is in the fund. Stewardship Rating. See $ manager’s own money is in the fund. Snapshot. Initially, consider only Snapshot. Initially, consider only – no load funds –<1% expenses –turnover < 30%/yr

6. Suggested Sequence Chart of five year returns vs. S&P. Chart of five year returns vs. S&P. “Performance More” for 10 yr. returns. “Performance More” for 10 yr. returns. Click “Purchasing Info” for open / closed Click “Purchasing Info” for open / closed “Snapshot” for total assets, fees, turnover, management. “Snapshot” for total assets, fees, turnover, management. “Management tab” to see number, tenure and performance of managers. “Management tab” to see number, tenure and performance of managers. “Stewardship” Read it all! “Stewardship” Read it all!

7. Let’s look at some Mutual Funds VFINX message… index fund MUTHX message… fund expenses MUTHX message… fund expenses VGHCX… A sector fund VGHCX… A sector fund DODFX… An international fund DODGX message… value fund

8. VFINX Vanguard 500 Index An S&P 500 Index Fund Total Returns are typically 2% ahead of the S&P 500 Index because of dividends on the S&P 500 stocks.

10. MUTHX Mutual Shares Z, a Franklin Family Fund Mutual Shares Z, a Franklin Family Fund Large-cap value started by pundit M. Price Large-cap value started by pundit M. Price Note Note –was recently closed –Classes A, B, C & R  same portfolio  same ratio of stocks in portfolio  higher fees and lower returns!

12. VGHCX Vanguard Health Care Vanguard Health Care Note how the five and ten year performance has out paced the S&P Note how the five and ten year performance has out paced the S&P Great to own, but closed to new investors! Great to own, but closed to new investors! A favorite of BI members for many years A favorite of BI members for many years

14. Category Characteristics Various categories of funds behave differently in bull and bear markets Various categories of funds behave differently in bull and bear markets Compare Performance Compare Performance –Funds recommended by non-BI source –compare large cap growth –vs. large cap value –vs. mid cap vs large

19. International & Foreign Funds Consider Currency Risk Consider Currency Risk Consider the dollar’s strength Consider the dollar’s strength Here is one new fund to consider Here is one new fund to consider

21. Value Funds Solid during bear and bull markets Solid during bear and bull markets Consistent, reasonable returns Consistent, reasonable returns

22. DODGX Dodge and Cox Stock Fund Dodge and Cox Stock Fund Lagged S&P during the internet bubble Lagged S&P during the internet bubble Now leads the S&P Now leads the S&P Excellent long term returns Excellent long term returns Excellent stewardship grades Excellent stewardship grades Fund Family gets high marks Fund Family gets high marks Invests in contrarian (unloved and beaten up) stocks Invests in contrarian (unloved and beaten up) stocks

24. DODGX lags S&P 500

25. DODGX lead S&P 500

26. Maybe 10 years isn’t enough… So… Maybe 10 years isn’t enough… So…

27. Select Mutual Fund Returns Sources: 1985 to 1997, AAII’s Low Load Mutual Fund Handbook; 1997 to Present, Morningstar

28. Index S&P 500 Value Funds Growth Fund

29. S&P 500 Value Funds Growth Fund Danger is buying Index or Growth here.

30. 15% Double in Five Years $20K $40K $80K $160K Isn’t Compounding Wonderful !!!

31. Hypothesis: Value Funds are less volatile than growth and index.

32. Value investing is a learned, predictable process applicable to Buying stocks.

33. Value Funds escaped the Internet Bubble.

34. Value lagged growth during the boom. Value led growth during the bust.

38. We’ve Covered… Financial Planning Financial Planning Mutual Fund Categories and averages Mutual Fund Categories and averages Taxes Taxes Comparison Tools Comparison Tools Morningstar web-site Morningstar web-site Ten and 20 year histories of selected funds Ten and 20 year histories of selected funds And more And more

39. Questions? On any of the above? On any of the above? That’s all Folks! That’s all Folks!

40. I Encourage You to LEARN Web sites, in addition to the ones we’ve studied today, like www.finance.yahoo.com/, www.moneycentral.com, etc. Web sites, in addition to the ones we’ve studied today, like www.finance.yahoo.com/, www.moneycentral.com, etc. Basic Accounting. Basic Accounting. –Not bookkeeping –Understanding mutual fund financial statements and their tax implications from the point of view of the investor. Using Qualitative, (non-numerical) Data. Using Qualitative, (non-numerical) Data.

41. Tutorials on the web http://www.morningstar.com/Cover/Classr oom.html http://www.morningstar.com/Cover/Classr oom.html http://www.morningstar.com/Cover/Classr oom.html http://www.morningstar.com/Cover/Classr oom.html http://www.betterinvesting.org/mutualfun ds/courses/ http://www.betterinvesting.org/mutualfun ds/courses/ http://www.betterinvesting.org/mutualfun ds/courses/ http://www.betterinvesting.org/mutualfun ds/courses/ http://finance.yahoo.com/funds/basics http://finance.yahoo.com/funds/basics http://finance.yahoo.com/funds/basics http://www.aaii.com/Classroom/ http://www.aaii.com/Classroom/ http://www.aaii.com/Classroom/ And many more! And many more!

42. This time is for you! Any questions? Any questions? Any funds you would like to look at specifically? Any funds you would like to look at specifically?

43. A Recommended Read Contrarian Investment Strategies, The Next Generation, by David Dreman Contrarian Investment Strategies, The Next Generation, by David Dreman

44. Mark Your Calendars! Coming Attractions: Special Stock Study Computer Group Meeting: 6:00-8:00 pm, Wednesday, August 15 at the JCC, 4126 Executive Drive, La Jolla. Manifest Investing’s Mark Robertson Special Stock Study Computer Group Meeting: 6:00-8:00 pm, Wednesday, August 15 at the JCC, 4126 Executive Drive, La Jolla. Manifest Investing’s Mark Robertson InvestEd, Costa Mesa, August 17-19 InvestEd, Costa Mesa, August 17-19 Edufest, SD BI Chapter Annual meeting and Education Faire, September Edufest, SD BI Chapter Annual meeting and Education Faire, September SSCG Meetings begin October 4 th SSCG Meetings begin October 4 th at 6:00pm at The JCC at 6:00pm at The JCC

45. A few last details Evaluation Form Evaluation Form –How did you find out about the workshops? –What did you like most about the class? –What did you like the least? What would you like to have included in the class that was missing? What would you like to have included in the class that was missing? Thanks for coming. We hope to see you again in August, September and on... Thanks for coming. We hope to see you again in August, September and on...