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Veteran Mutual Fund Investors

If you’re a Veteran Mutual Fund Investor, you’re a market participant with intermediate skills. You have actively maintained your own mutual fund portfolio by researching and selecting your own fund investments for at least a few years. If your ideas originate from the news, financial magazines or friends, you’ve fully researched these opportunities to determine their suitability, potential opportunity and possible risks. You wield solid understanding of your personal risk tolerance and investment objectives. Your general market knowledge has likely deepened over time and you understand basic macroeconomic trends that influence the financial markets.

A veteran realizes the importance of a fund manager’s role and can assess a fund’s current investment and allocation profiles as determined by the prospectus. Veterans understand how funds are priced and traded. You are savvy when analyzing costs and fees of potential mutual fund investments, realizing no-load / no-transaction fee funds typically have higher expense ratios, and as such may actually cost more than funds with a sales load over the long term. Veterans are conscious of how these costs can impact performance.

You have grown from reading just the first page or two of the prospectus, to digesting the document in its entirety to ensure the fund’s investing approach is inline with your own. As a mutual funds veteran, you are fully aware that mutual funds can go up and down in value and that your fund shares can become worth more or less than their original cost. As a veteran, you know not to be lured solely by a successful track record because you realize past performance will not necessarily lead to gains in the future.

As a Veteran Mutual Fund Investor, here are the concepts you should master:

  • Understand the full terms of the prospectus
  • The different asset classes of mutual funds
  • Mutual fund tax consequences and ramifications
  • Early redemption fees
  • Fund investment profiles, manager style and tenure
  • Comprehensive knowledge of various fund families
  • Sales-load breakpoint schedules
  • The ability to compare fees and expense ratios of various kinds of funds competently

Veteran Mutual Fund Investors can improve their skills by:

  • Learning about inter-family exchange of funds to help manage your portfolio
  • Continuing to use TradeKing’s Mutual Fund Screener for investment opportunities
  • Reviewing mutual fund strategies geared to the veteran skill level
  • Reviewing Determining Market Outlook
  • Anticipating and planning for all possible outcomes for your investments, not just the positive scenarios
  • Engaging members of the Trader Network to work through investing ideas
  • Inquiring members of the Trader Network to explain their investing analysis
  • Challenging members of the Trader Network with an alternative point of view
  • Attending or watching TradeKing’s free educational webinars, geared to the veteran skill level

Veteran Mutual Fund Investors should steer clear of the following:

  • Do not take advice from phone solicitations, direct-mail or email newsletters regarding investments
  • Do not invest in specialized mutual funds unless you completely understand the risks involved (sector funds, international funds, emerging market funds, bear funds, etc.)

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