Buying Tips

Match Fund Objectives to your Needs

• Understand your risk profile and investment goals
• Understand the funds investment choices/objectives (i.e. industry specific, socially responsible, etc.) and limitations (i.e., mutual funds may not be best choice for investors close to retirement age, etc.)
• Market volatility may be greater with Non-US investing funds.

Investment professionals are compensated for the services and support they provide investors, generally through a sales commission, or through 12b-1 and/ or services fees deducted from the fund's assets.

Diret-marketed funds typically offer fund shares with a low sales charge or non at all. Funds that do not charge a front end or deferred sales charge are called "no-Load" funds. Other fees aor expenses may apply.

Frequently Asked Questions - Mutual Fund

Where Can I Find Information About How These Products work, As Well as Benefits and Risks?
The best source of information is the funds prospectus. This document contains detailed information about the fund, its features, its performance and more. You should receive and read the prospectus thoroughly before making any financial commitment to the fund.

Can I make changes if My Situation Changes? How?
Yes, the propectus spells out what requirements apply to fund activities and any fees related to the administration and record keeping of thos events. If you purchased the fund through a registered representative, he or she can also explain these details. inforamtion is also available from the mutual fund company, usually via a Web site or shareholder information line.

Should I Redeem my Fund Balance if the Market Goes Down?
Mutual funds are typically part of a longer-term financial strategy, and are not normally intended to be utilized as short term (12 Months or less) trading vehicles. Because of the potential of fluctuations in value of the underlying securities in fund, the fund itself may experience a change in overall value as well. As such, the sale of fund shares that have delined in value should only be considered if such a transaction is conistent with your total financial plans and goals. An important consideration is "time in the market, NOT timing of tht market."

How is a Mutual Fund's Price Determined?
The process of pricing a fund usually begins at the end of each business day when the New York Stock Exchange closes.

• Remember, past preformance is no guarantee of future results.
• To determine a mutual funds share price, follow this formula:

Fund share price or Net Asset Value (NAV) = Market value in dollars of a funds securities muns its liabilities, divided by the number of investor shares outstanding.

Orders received during a business day will be executed at the NAV determined at the close of business that day. This process is referred to as forward pricing.

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Investment Concepts

Inflation
Inflation is an increase in the volume of money and credite relative to available good and services, resulting in continuing rise in the gerenal price level. Over time, inflation reduces the value and purchasing power of money.

Risk Versus Reward
Generally, the greater the amount of risk assumed by an investor is, the greater the potential reqards are. Before you make any investment decisions, you should know your risk tolerance. Factors such as age, income and years unit retirement, should be considered before making any investment decision.

Market Fluctuations
Upswings or downturns in market activity impact the value of investment instruments or accounts. As a result, investments may be worth more or less than their original cost when ultimately redeemed.

Asset Allocation
Asset allocation is the process of developing a diversified portfolio by mixing different asset classes - such as stocks, bonds and cash equivalents - in varying proportions to help reduce risk and maximize potential returns.

Diversification
An investment portfolio that contains a number of different types of investments tends to have a lower level of risk than a portfolio with more similar types of investments. There is no assurance that a diversified portfolio will achieve a greater return than a non-diversified portfolio.

Dollar-Cost Averaging
Dollar cost averaging advocates the investment of a constant dollar amount, regardless of the price of the investment. Over a period of time, thsi generally results in a lower purchase price per investment than if the total purchase was made a t on time.

Compounding
Compounding takes plase when the returns (such as interest, dividends and capital gains) on investments start earning returns of their own.

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Objective of Bond - Income Funds

Corporate Bond Funds - Seek current income, while preserving capital, by investing in diversified portfolio if high-grad corporate fixed-income securitied.

High Yield Bond Funds - Seek current income, while preserving capital, by investing in diversified portfolio of lower grade, higher yielding corporate and/or government fixed-income securities.

World Bond Funds - Seek to provide high, long-term total return consistent with prudent management by investing in quality fixed-income securities issued by major world government and corporations around the world and in the United States.

Government Bond Funds - Seek current income while preserving capital, by investing in obligations issued or guarantee be the U.S. government or its agencies.

Strategic Income Funds - Seekt o provide a high level of current income and preservation of capital.

State Municipal Bond Funds - Seek to provide current income free from federal and state income taxes. Also seeks to preserve capital.

Municipal Bond Funds - Seek to provide a high level of current income exempt from federal taxes, consistent with the preservation of capital.

Basic Types of Mutual Funds

Long Term Funds

• Stock /Equity - funds that invest in the variety of stocks
• Index - equity funds that attemt to mirror the performance of specific index, such as the S&P 500.
• Bond - funds that invest in the variety of bonds.
• Hybrid - funds that invest in a combination of stacks, bonds and other securities

Short Term Funds

• Money Market - funds that invest in securities that generally mature in one year or less (very liquid).

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