Prepared by George Oviedo
320 Palisade Avenue
Bogota, NJ 07603
Tel: 201-489-1118
Fax: 201-457-1082
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What is a Mutual Fund?
What is DCA?
What if Markets Go Up ?
What if Markets Go Down?
Summary
Definitions
Disclosure
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A mutual fund is a pooling of assets investing
in diversified stocks or bonds. Advantages to
investing in mutual funds include
diversification, professional management, high
liquidity and accessibility for people with a
smaller amount of capital.
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Dollar Cost Averaging (DCA) is a systematic
way to invest in mutual funds on a monthly
basis.
Many times large initial investment
contributions are waived in light of a monthly
stream of investments.
Some mutual fund families are willing to start
an investment plan with as little as $25 dollars
per month.
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If markets go up, the investments will rise
accordingly based on the underlying
investment’s performance of the holdings of
the fund.
For a younger investor a more aggressive
position may be encouraged but factors such as
risk tolerance, investment experience and time
horizon for use of such funds have to be taken
in consideration.
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Markets go up and down. Investors tend to get
nervous when the markets turn dramatically to
the downside.
The use of a DCA program can benefit an
investor in rough or uncertain times. As prices
for the underlying funds drop DCA investors
would be able to purchase more shares at a
lower price.
If the markets turn positive, the benefit from
buying low can be stunning.
* Relationship between the price per share and cost per share to the investor.
Past performance does not guaranteed future results
The figures on page 7 are actual
investments into the Alger Capital
Appreciation fund for the year of
2008
The client kept putting away monies
even through what seemed to be a
desperate period in the stock markets
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The graph on page 8 represents the
accumulation of shares over a longer period in
the Alger fund
When the price drops in the underlying fund
the amount of shares increases over time
You are able to build a nice base of shares at
lower prices
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If the DCA plan is un-interrupted during down
markets both the value and average cost will
decline as well
If the markets start to turn positive, as
evidenced in the Gain versus Loss Graph, the
value of the account can have dramatic gains
In the case of the Alger Fund during 2008 and
beyond the loss seen in 2008 was completely
reversed
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A consistent program of investing can help one
achieve specific goals
A financial representative can help a novice
investor prepare to face their goals
“When the Markets Go Down” impulsive
selling could cause an investor to miss the
upside
Working with a professional representative can
help ease the mind of an investor during weak
markets
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Stocks: A stock is an ownership interest in a business. There are over 10,000
corporations that are publicly traded.
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Bond: A bond represents a debt or an IOU from the issuing party. Bonds are issued by
governments and corporations. The amount of loan is known as the principal and interest is
the compensation given to the lenders.
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IRA's: Individual Retirement Accounts- are vehicles designed to provide for the "golden
years". The two types of IRA's are Traditional IRA's and Roth IRA's. Educational IRA's are also
a vehicle that can be utilized for a child's education.
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Annuity: A contract between an individual and an insurance company in which
the individual pays money into an account in exchange for a guaranteed payment at a later
date. Annuities offer tax-deferred growth.
Securities offered through Cadaret, Grant & Co., Inc., member FINRA/SIPC. One Lincoln
Center, Syracuse, NY 13202. Telephone number: 315.471.2191
Performance figures displayed herein represent past performance and are not predictive of
future results. The investment return and principal value of an investment will fluctuate so that
An investor’s shares/units, when redeemed, may be worth more or less than the original cost. Investment
securities are not FDIC-insured, nor are they deposits of, or guaranteed by, a bank or any other entity.
The information has been gathered from sources believed to be reliable, however, Cadaret, Grant does not
guarantee the accuracy or completeness of the information. The cost basis of securities positions is
being provided by the account holder and neither the representative not Cadaret, Grant makes any
representations as to the accuracy of such cost basis. The cost basis information provided is meant as a
general guide and should not be relied upon as tax or legal advice.
Securities offered through Cadaret, Grant & Co. Inc. Member FINRA/SIPC New Horizon Financial Group
& Cadaret, Grant are separate entities. The figures contained herein are for illustrative purposes only
and have been derived from sources deemed to be reliable. There are no assurances that any
particular method or strategy will achieve a desired result. Past performance is not indicative of future
results.