1. MUTUAL FUNDS: MAYBE ALL YOULL EVER NEEDSmart InvestingEmmet ONeal LibraryMountain Brook, ALFebruary 2, 2012

2. Disclaimer Andreas Rauterkus is not a registered investment advisor or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes. Andreas Rauterkus does not purport to tell or suggest which investment securities attendants should buy or sell for themselves. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.

3. Why Mutual Funds? Professional Portfolio Management Automatic Diversification Easy to Buy and Sell Net Asset Value (NAV) Small Minimum Purchases Automatic Reinvestment of Earnings Easy Access to Information Morningstar

4. Whats the Cost? Front-End Loads Upfront sales charge Back-End Loads Redemption fee Deferred Loads Sales fee charged if redeemed too early Marketing Fees 12b-1 fees Management Fees Expense Ratio Management and and 12b-1 fess as % of the funds assets Does not include load fees Brokerage Firms usually offer wide array of non-transaction fee funds

5. Calculation of Mutual Fund CostsInvest $10,000 in load mutual fund. The load fee is 4%.Actual investment = $10,000(1-.04) = $9,600In addition fund charges .75% management fee and .10% 12b-1 fee. Fees are charged on average amount invested in the fund and recorded at the end of the year. Assume that the fund returns 5% each year. Avg. investment: [$9,600 + $9,600(1.05)]/2 =$9,840 Annual costs: $9,840(.0075+.0010) = $83.64 Value of the investment at year end: $9,600(1.05) - $83.64 = $9,996.36

6. Which Fund Should I Pick? Investment Objective? E.g. growth, aggressive, bonds, etc. Investment Style Value stocks vs. growth? Small vs. Midsize vs. Large Cap Performance Record Relative to the market Relative to funds of its type Fees Expense Ratio

7. Funds For Long-Term Investors Growth Funds Growth and Income Funds Balanced Funds Invest in stocks and bonds Index Funds Global Funds International Funds Socially Responsible Funds

8. Funds for Income Oriented Investors Corporate Bond Funds Global Bond Funds U.S. Government Bond Funds Ginnie Mae Funds Municipal Bond Funds Generally federal income tax free

9. Other Types of Funds Aggressive-Growth Funds High Yield (Junk) Bond Funds Single-Industry Funds Exchange-traded Funds Bought and sold like stock No load fees Brokerage commission

10. Total ReturnRecall previous example: Value of the investment at year end: $9,600(1.05) - $83.64 = $9,996.36Initial investment = $10,000Total return after one year: ($9996.36/$10,000) 1 = -.000364Or -.0364%

11. THANK YOU!Please, join me for the next workshop:March 1, 6:30PM