2.S: Summary

Congratulations ‒ You Have Finished Chapter 2 ‒ Mutual Funds: Investments for the Masses

You have reached the end of chapter 2, Mutual Funds: Investments for the Masses. In this chapter, you have:

• Been introduced to the definition of a mutual fund, aka an investment company, and reviewed the growth of the mutual fund industry
• Investigated major mutual fund share classes and how mutual funds charge their investors for the services of the mutual fund
• Explored the major mutual fund categories from the most risky to the least risky
• Compared and contrasted active versus passive portfolio management of mutual fund assets
• Examined a few mutual fund families and concentrated on a sample mutual fund with decades of investing experience

You should now be able to:

1. Describe the various components, characteristics, benefits, advantages, and disadvantages of mutual funds
2. Identify and describe the various ways in which mutual funds charge their investors for their services and explain the actual costs borne by the investor
3. Outline the major mutual fund categories and their risk/return profiles
4. Discuss the advantages and disadvantages of active versus passive portfolio management of mutual fund assets
5. Identify a sampling of mutual fund families and the services available to mutual fund investors
6. Describe the benefits of long-term, prudent, consistent mutual fund investing and the pitfalls of short-term, uniformed, impatient mutual fund investing

So are you ready to be bored to wealth with mutual funds? Well, if mutual funds are not exciting enough for you, you are in luck. In our next chapter we begin the process of studying stocks. Before that, though, study this material thoroughly. Remember that you are going to be the Investment Guru for your friends, family members, and colleagues. You can’t let them down!

There is a Future for You in the Investment Services Industry

Have you enjoyed listening to and watching the presentations and reading the text? Instead of being dry and dull, did the material seem exciting and promising to you? Can you envision yourself relating this material to potential clients who are terrified of investing but know they need to do something soon because they are not getting any younger? Would you like to help them understand that investing is not as difficult as it seems and that you can show them investments that are prudent, long-term oriented, and have performed well over decades?

If so, please consider pursuing a career in the industry. The financial and investment industry is enormous. The industry is always looking for new, energetic individuals. There are numerous career path opportunities. From banking to real estate finance to insurance to brokerage firms, there is a place for you. In fact, the industry is actively seeking bilingual speakers and women. Going forward, they understand that diversity is essential to the success of their businesses. They simply love ex-military folks. (The financial industry is highly regulated and who better than those who have already lived and worked in a structured, regulated environment?)

Here at Southwestern, we offer an Associate in Business Administration with an Emphasis in Finance. We also offer a Certificate of Achievement in Financial and Investment Services. Either of these will help you land a position at a bank or credit union, an insurance company, a real estate finance firm, a brokerage or other investment management company, or any of the many other finance-related and investment-related companies.

You don’t believe me? You think you need a four-year degree from a prestigious university? Aha! You are wrong! The dirty little secret in our industry is that a degree from a prestigious university is not a guarantee that someone will perform well as a financial adviser with the general public. The recruiters will tell you that they have no reliable method for predicting how someone will do in the industry. Someone with a certificate from a community college might surpass a whole room full of graduates from the Ivy League universities.

I have my own predictors. Are you a positive, optimistic person with a sunny disposition? Do you like to socialize? Do you enjoy meeting new people? Do you want to help them succeed? Are you not afraid to ask someone if they need your help? If they say, “No,” are you still willing to go to the next person and ask the same question ... and then go on to ask twenty-seven more people? In short, are you a go-getter who refuses to give up? Will you never give up?

If you can answer, “Yes,” to all or most of these questions (especially the part about never giving up), I guarantee you will do well in the industry. You might bounce around from one position to another for a bit but you will find your place. Talk to a counselor about our programs. Or better yet, please contact me. I gotta’ warn ya’! I can talk about finance and investments far longer than most any reasonable person would ever want to listen.

I wish you all tremendous success in the future and I look forward to talking to you about a potential career in the finance and investment industry.

Your Feedback, Please

Remember that we want this class to be the best class you have ever taken! We want this class to be one of the few classes that you can look back on 5, 10, 20, or more years and say, “Ya’ know. That Introduction to Investments class really helped me in this crazy, beautiful, scary, joyful, absurd, sad adventure that we call life.” As always, contact me directly if you have any questions, comments, criticisms, suggestions, complaints, etc.

We are now ready for stocks. Exciting stocks! Sexy stocks! Risky stocks! Dear Rising Investment Gurus, read and study consistently and earnestly. See you in our next chapter.