Show #277 - Airing Sunday, December 26th, 2004 at 12:30pm
If you want to try to predict your health future, you go to the doctor for a complete check-up. That may include x-rays, scans and lab tests. If you want to gauge your financial future, you have to do the same thing. Get a financial check-up. Here to explain that one of the best tools for a financial check-up is a Principia Report is a prince of a guy, Jim Lineweaver, founder of Lineweaver Financial Group.
Question: Jim, last time you were on, we took a look at a Morningstar mutual fund report. How is a Principia report different, and how can it be helpful?
Answer: Principia allows you to take a look at everything in your portfolio. It groups the mutual funds and the stocks you own into one comprehensive analysis.
Question: Let’s get right into a report. There are some sections I know you wanted to highlight. First is the Composition. What important information can we glean from here?
Answer: Composition shows a breakdown of the fund’s portfolio holdings into investment classes: Cash, US Stocks, non-US stocks, Bonds and Other (including preferred stocks, convertible bonds, convertible preferreds, warrants, and options).
Composition breakdown allows investors to glean information about the portfolio’s investment strategy. A portfolio with a large percentage of its assets in cash, for example, might indicate a defensive position, while a heavy bond exposure in a balanced fund may reveal a solid income orientation.
In knowing a fund’s composition, an investor can be sure that he or she is getting the type of fund they’re looking for. If you’re looking for an aggressive growth fund, for example, the fund’s composition shouldn’t reveal a 35% bond position.
Question: Next we’ll look at Current Investment Style.
Answer: This section shows the breakdown of the portfolio in terms of large cap, mid cap, and small cap, and value/core/growth.
Question: The third section—Trailing Returns. What’s that all about?
Answer: This area shows both how the portfolio has returned its investment over the past 3 months, one year, 3 years, 5 years and 10 years.
The second line shows how its return compares to the S&P over those same time periods.
Question: What does the Average Star Ratings tell you?
Answer: Last time we discussed the Morning Star ratings for individual mutual funds—it’s the measure of a fund’s risk-adjusted return, relative to the funds in its category.
Here we are looking at the star rating for the portfolio, the managed products, and any stocks involved.
Question: Finally, what is the Average Expense Ratio?
Answer: This shows the average expenses the investor is charged for the management of the fund. It includes the average expense ratios for no-load, front-end load, deferred-load, and level-load shares, allowing investors to compare funds against those offerings with similar fee structures.
Question: Can we get a principia report at the library?
Answer: No. This is expensive software. You can buy for $1,000/year+ But if your viewers would like, they can bring their investment info to us, we’ll run the Principia evaluation for them, for free.
It’s the end of the year, a great time for a financial check-up. If you’d like a Morningstar Principia evaluation for free, give Jim Lineweaver a call. The number’s up next.
Jim Lineweaver is a registered representative of and offers securities through Walnut Street Securities, Inc. (WSS) Member NASD/SIPC.
Branch Office:
9050 Sweet Valley Drive,
Valley View, OH 44125
216-520-1711
WSS does not offer tax or legal advice.
Lineweaver Financial Group is not a subsidiary or affiliate of WSS.
Material discussed is for information purposes only and should not be the basis for any investment decisions.
