Cost and Fees:
1. A sales charge: this is sometimes referred to as a load or front-end load. It typically varies from 1%-8.5% of your total purchase. It is used to pay commissions to brokers and financial advisors whoe sell the shares of fund for the investment company. The more shares you buy, the less you pay

2. No sales charge: most funds that sell directly to the public are called no-load, which means they do not charge a sales charge

3. A deferred sales charge(contingent deferred sales charge or CDSC). you might be charged when you sell your shares. Many funds have a sliding scale for the CDSC so it completely disappears after a few years if you continue to hold the shares

4. Other costs: some funds charge maintenance fees for accounts below a minimum balance or other miscellaneous charges

What is a fee:
 Fees are what you pay the fund manager for its expertise and the expenses of the fund. Fees are paid out of the fund's assets, not directly form your account.

Marketing expense fees: called 12b-1 fees and are used to pay the marketing wxpenses of the fund.This can mean distribution, promotions, commissions to brokers who sell the fund, or advertising expenses. It may be as large as 1.25% per year of the total assets of the fund

Management fees: Pay for the manager's salaries and expertise for managing the fund

Other fees: operating expenses , administrative cost, etc

things you need to know:
if you know how long you plan to hold your shares, you may be able to save yourself some money.
1. if you plan to hold share for a short time( less than 7 years), no up-front fee but a greater annual fee makes more sense
2. if you plan to hole share for a long time( more than 7 years), paying more up-front and less annually makes more sense.

Portfolio Turnover:
what does it mean: A ratio of 150% means a fund with $100 million of assets sold $150 million worth of investments in 12 months

what is noral: 10%-500%

what is a good rate: a high or low turnover ratio is not good or bad in itself

what is the downside: a high turnover indicates higher cost( and lower shareholder returns)

which fund do you choose: a low turnover ratio means lower expenses( comission) for trading and lower taxes for shareholders, because the lower turnover may mean that the fund has unrealized gains

Investment policies:
What you still need to know:
1. what types of investment the assets are primarily invested in
2. The percentages of how the assets are divided
3. Whether the fund can invest in foreign assets, derivatives, or other types of investments
4. What defensive techniques the fund may use to protext its protfolio from downturns in the markets
5. What type of analysis a fund manager may perform to make its buy and sell decisions
6. Whether the fund may lend securities to others in order to earn money for the fund
7. Whether there are any legal processdings pending against the fund
8. Any other information the SEC believes is relevant for investors to be able to make an informed decision

A diversified fund is one that invests no more than 5% in one company and 25% in one industry.
A non-diverisfied fund may invest up to 10% in one company and 25% in one industry.

Management of the fund:
what they have to tell you:
1. the name, title, and length of service of each portfolio manager and that person's business experience over the past five years.
2. what the advisor's specific role is in the management of the fund, and what that role is relative to manager's function
3. The name and address of each advisor
4. The advisor's experience
5. what services that advisor provides for the fund
6. what wach advisor gets paid and how that amount is calculated

A fund that has been in existence for more than one year is required to give investors a financial highlights talbe