Smith Asset Management: Mutual Fund Advice You Can Count On

At Smith Asset Management, we pride ourselves on offering some of the most reliable wealth management and mutual fund advice in Pennsylvania and New Jersey. Frank Smith, Smith Asset's primary financial adviser, has a resume with more than three decades of investment experience. That experience ranges from institutional portfolios worth nine figures to individual retirement accounts.

So if you're looking down the barrel of middle age and need to get working on your retirement plans, Smith Asset can give qualified advice on choosing the right mutual funds. Of course, the best mutual fund advice for you will depend on your individual situation. But some broad rules do apply.

First: What is a mutual fund? Put simply, a mutual fund is a pool of money, contributed by a collection of investors, invested in a set of stocks or other interest-bearing instruments. It's like a car you might buy with your spouse -- individually, you each might only be able to afford a small economy car, but if you pool your funds, you can afford a larger luxury car or SUV. Similarly, a mutual fund is a set of more high-yield and reliable stocks that you can afford to purchase by pooling your funds with other investors.

What kinds of funds are out there? Mutual funds fall into a variety of categories, and while reduced risk is characteristic of all funds, some are more risky (and thus may yield greater returns) than others. Debt funds, for instance, have a guaranteed return, since they typically invest in bonds and other government-issued items. But the returns on these are limited. Equity funds, on the other hand, carry more risk since they're primarily composed of shares of corporations. But the potential rewards are greater. Some funds are "sector-oriented," meaning they're composed entirely of shares of some specific type, like tech stocks. Other funds are more diverse.

Look at the prospectus. This is probably the most basic piece of mutual fund advice a financial advisor can offer, but it's also one of the smartest. A prospectus is like a guidebook to a mutual fund, and these can be obtained for free from each fund's manager. The prospectus contains all the details of the fund, including its investment objectives and the risks of investing.

Each mutual fund has two types of prospectus: a statutory prospectus and a summary prospectus. Both are useful in your research efforts, but a summary prospectus is only a few pages long and contains little detail; the statutory prospectus contains much more information, but may be a bit bewildering to a beginner who's working without the help of a financial advisor.

Smith Asset Management provides its clients with exactly that kind of help, and mutual fund advice is only a small part of what we offer. Call us today to see how we can help secure your financial future.