Investing in Mutual Funds Professional Management, Diversification Lead Benefits Mutual funds may be the right investment for the core of your portfolio if you desire professional money management and the diversification inherent in owning a variety of stocks or bonds. Mutual funds may satisfy an array of investment strategies or time horizons. They carry individual objectives that cater to conservative or aggressive investors, those that seek growth or value stocks, and many other combinations or singular focuses. Investors buy shares in the fund rather than in individual securities. Their money provides the cash flow necessary for the fund's management team to purchase investments in line with the fund's objective. Mutual fund investors make money the same way that individual stock pickers do. Either the securities in the fund pay interest or dividends or the value of the underlying individual securities increases. Of course, mutual funds are not immune from losses in negative markets. The Benefits of Mutual Fund Investing Not having to do the research to make individual stock or bond selections, and pay the costs necessary to facilitate a purchase or sale, make mutual fund investing a simplified way to put your money to work. Via mutual funds, you may benefit from:   Professional management: Mutual funds are managed by individuals or groups who monitor investments continuously and have access to research and resources that most individual investors do not. They are experts in monitoring economic conditions and their impact on the fund's holdings. The experienced professionals work to pursue the fund's objectives in the best interest of the fund's shareholders. Diversification: Mutual funds generally increase diversification due to the nature of their multiple holdings. Some mutual funds are more concentrated than others but most will hold dozens, if not hundreds, of investments in a particular asset class or sector. Cost: By investing in a fund that pools your money with other shareholders, mutual fund investors are able to obtain diversification less expensively than they are likely to by buying individual securities. Mutual funds do charge management fees but they may turn out to be less than transaction costs for maintaining a diversified portfolio of many individual securities on your own. Choice: Whether you and your financial professional determine you would like to invest in stocks, bonds, money market instruments or real estate, there are mutual funds to meet all investment objectives. In many cases, balanced funds, or lifecycle funds, may include investments in a variety of asset classes or styles within a single fund further simplifying your decision. Ease of purchase/redemption: Shares of mutual funds can be sold on any day the markets are open. You buy or sell shares based on the net asset value (NAV) established at the close of each day's trading. This liquidity means you don't have to pair with a buyer or seller first to establish the price of your investment. It's also simple to reinvest dividends, transfer funds and set up automatic purchase programs. Government regulation: The Securities and Exchange Commission regulates all mutual funds. The SEC requires funds to meet operating standards and disclose complete information to investors. However, the FDIC or SIPC does not insure mutual funds. Mutual funds may lose money as there is no guarantee that the investments held within mutual funds will not suffer due to market fluctuations or specific problems related to the companies that are invested in. Fund objectives, risks, charges, and expenses should be carefully considered before investing. A prospectus containing this and other important information can be obtained by calling (866) 676-7680 or by visiting this page on russell.com. Please read the prospectus carefully before investing. Copyright © Russell Investments 2005. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an as is basis without warranty. Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company. Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. Securities products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments. For information on the Financial Industry Regulatory Authority, go to www.finra.org. RFD 4477. First used, October 2004.			Learn the benefits of Russell's LifePoints Funds which have pre-determined asset allocations and are automatically rebalanced.   Printer friendly version of this page Send feedback or comments Site Search

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