By: Michael E. Martinez

Before you buy a mutual fund, I always have recommended that you read the prospectus report. This helpful reading tool can tell you quite a bit about a particular mutual fund and whether its appropriate for you. Usually you can go to the fund's website and view it from there. If you'd like you can order the reports and have them mailed to you. So really theres no excuse for not knowing your fund's objectives and their major holdings.

The prospectus reports are normally very detailed and if you still have questions, often the contact information is provided for you. It mentions the fund's strategy whether its conservative, moderate or aggressive methods to investing, what type of investor should be in this fund as well as the equity style box. The equity style box mentions the Morningstar category for each fund, also the Morningstar rating is mentioned. Past performance, risks, and fees have to be mentioned, if not it's against the law on the fund's part.

The statistics such as the inception, net assets, number of holdings, beta, P/E, and benchmark indicies are important details that can be the determining factor for you buying that particular fund or looking elsewhere. If you would like me to research a particular mutual fund for you, please contact me and I'll be more than happy to make recommendations for you, if you have trouble reading a certain prospectus report.