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A couple of good mutual fund reads

At last, a how-to book about a mutual fund's prospectus. And, reading it is not likely to put you to sleep.

We all know that there's nothing inviting about a mutual fund's prospectus. Just the look of them can be ghastly. But looks can be deceiving for inside every prospectus is all the stuff you really need to know about the mutual fund you're investing in. Like, who's managing it, what it may and may not invest in, the fund's expenses, etc. etc.

Why investors generally don't read a fund's prospectus probably has as much to do with its layout as it does tiny-print content. If that's what has kept you away, now there's a very user-friendly book on the market titled, How To Read A Mutual Fund Prospectus, by Thomas Lemke and Gerald Lins. Both are attorneys specializing in mutual funds and investment management services.Lemke says the reason the book was written was mom-driven.

"We wrote this book for our mothers because both of us learned that our mothers could understand a prospectus if they knew where to look, " he says. "But, like most people, they were intimidated by the document."

While the book's table of contents covers every subject from Why Should You Read a Prospectus? to Shareholder Services: Important Feature of Your Fund Investment, it's the book's layout and design that really invite you in.

For instance, there is plenty of white space, plenty of charts and plenty of appendixes addressing subjects from other books to read, to fund telephone numbers and web site addresses.

You'll even find a number of boxes with snippets of information in them. One box reads, "The fund's published total return can differ ---sometimes dramatically--- from your total return." And another states, "If you like to "switch" funds frequently, seek out those funds especially designed for switches. Most other funds restrict frequent exchanges."

To get copy of, How To Read A Mutual Fund Prospectus, call 1-800-247-6553, or order it at, www.readtheprospectus.com . This 240-page book costs $19.95, plus $5 for shipping and handling.

Vanguard's Plain Talk Library has a new brochure titled, New Ways to Boost Your Retirement. Inside it is information about the recent $1.35 trillion tax cut and what kind of changes it means for you in terms of saving for retirement.

One result of the tax change is that investors will be able to put more money into their IRAs than ever before. In 2002, the maximum contribution increases from $2000 a year to $3000 per year. And that top-end limit continues to grow: In 2005, the maximum contribution will be $4000; three years later, in 2008, it will be $5000.

The piece also includes four ways to make the tax law work for you. They are: Increase your savings goals; contribute more to your IRA; catch up on retirement savings; and, consolidate your assets and simplify your financial life.

To order a free copy of New Ways to Boost Your Retirement Savings, call The Vanguard Group at 800-992-0855. Or, visit their web site at:www.vanguard.com,then click-on their Education, Planning & Advice section.

To read more articles, please visit the column archive.

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