Understanding mutual funds in the newspaper

Saturday, February 14, 2009

We’ve all seen the financial pages in the newspaper. Usually we flip past it on the way to the comics, the horoscope, of if you’re like me, to the sports section. But what do all those squiggles and arrows mean anyway, and now that you’re thinking about investing in mutual funds, can you see how your fund is doing every day in the morning paper?

The answer is, of course, yes. And not only that but mutual fund listing are a bit easier to read with less complicated jargon that reading the stock prices next to it. Most major daily newspapers have the mutual fund section separate form the rest of the stock and bond information. There is usually a large, bold headline showing where the fund are listed.

Now that you’ve found where the mutual funds are listed, let’s try to decode all this information. Your fund will be listed alphabetically in the column under the name of the company that manages it. You’ll see three column next to each fund name. In the first column, you’ll see “NAV”. This is short for “Net Asses Value.” Don’t panic, this is just a simple mathematical formula that shows what each share in that mutual fund is worth. To determine how much your shares in that mutual fund are worth, just multiply the amount of shares in that fund that you own by the NAV.

The second column says Offer Price. This is what you would pay right now if you wanted to buy more shares. Often, you’ll see a NL in this column instead of a price. I bet you can figure out what that means. Yep! It means it’s a no-load fund and you would pay what the NAV is if you wanted to buy more shares. Not so scary anymore, is it?

The final column is the change column. This information is the same essential thing that you would see if you were reading the stock page: a + in this column shows that the value of your fund has gone up since the last day’s close, and a – shows that it’s gone down.

And that’s it! While the mutual fund page in your newspaper may look bizarre, once you break it all down you can see that it’s all pretty basic. So start checking your funds today and you can watch your money grow!




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