Morningstar Guide to Mutual Funds: Five-Star Strategies for Success [Paperback]

Christine Benz (Author)

Book Description

Publication Date: October 26, 2007

GUIDE TO MUTUAL FUNDS

SECOND EDITION

"Picking actively managed mutual funds is no mean challenge. And as the recent era underscores, past performance is of little help. The Morningstar Guide to Mutual Funds helps cut through the fog with a solid volume of constructive information. The central message--'truly diversify, keep it simple, focus on costs, and stick with it'--is not only timeless, it is priceless."
--John C. Bogle, founder and former CEO, The Vanguard Group

"Successful investors know they must do their own due diligence. Morningstar has done much of that homework in this guide. Leave it to Morningstar to get it right, offering smart ways to pick, build and monitor a portfolio. It's a commonsense guide that should grace every investor's shelf."
--Ted David, CNBC Anchor

"There's nothing Morningstar doesn't know about mutual funds. And at last, for ready reference, there's a book. You'll find everything here you need to know about managing fund investments, inside or outside a 401(k)."
--Jane Bryant Quinn, Newsweek columnist and author of Making the Most of Your Money

Editorial Reviews

From the Inside Flap

Since the publication of the bestselling original Morningstar® Guide to Mutual Funds, investors have confronted some challenging questions head-on. How do you find a mutual fund company you can trust? Are exchange-traded funds a viable alternative to traditional mutual funds? And perhaps a more fundamental question: Are mutual funds still worth investing in?

Completely revised and updated to meet the needs of today's demanding investor, Morningstar® Guide to Mutual Funds, Second Edition answers these questions and many more. Filled with commonsense advice that will help both the novice and seasoned investor, this book outlines the latest tools and techniques needed to select winning mutual funds, create a well-diversified portfolio, and help you reach your financial goals. It shares Morningstar's top mutual fund picks, provides sample portfolios for investors with short-, intermediate-, and long-term time horizons, and tells you how to avoid the pitfalls that trip up so many other investors. Most of all, it will allow you to take an objective look at your investments and make the most informed decisions possible.

Regardless of your investment experience or expertise, Morningstar® Guide to Mutual Funds, Second Edition will show you how to find funds that fit your needs today and in the future. In the following pages, Christine Benz, a Morningstar veteran, uses a detailed, yet easily understandable format to share the knowledge that Morningstar's experts have built over the past twenty-one years. This book delves into topics that will help you learn how to:

• Build a portfolio of funds that is tailored to your personal situation and goals
• Determine the role bond funds, index funds, and exchange-traded funds should play in your portfolio
• Keep your portfolio on the right track with quarterly and annual reviews
• Minimize costs with an in-depth explanation of expense ratios, loads, and other fund charges
• Understand the correlation between invest- ment style and risk
• Identify the key points in assessing the quality of a fund's manager, and your next steps if a fund manager leaves

Through a clear presentation of financial information and lively anecdotes, Morningstar® Guide to Mutual Funds, Second Edition will help you build and maintain a profitable mutual fund portfolio today and for years to come. --This text refers to the Hardcover edition.

From the Back Cover

Praise for Morningstar
Guide To Mutual Funds
Second Edition

"Picking actively managed mutual funds is no mean challenge. And as the recent era underscores, past performance is of little help. The Morningstar® Guide to Mutual Funds helps cut through the fog with a solid volume of constructive information. The central message—'truly diversify, keep it simple, focus on costs, and stick with it'—is not only timeless, it is priceless."
—John C. Bogle, founder and former CEO, The Vanguard Group

"Successful investors know they must do their own due diligence. Morningstar has done much of that homework in this guide. Leave it to Morningstar to get it right, offering smart ways to pick, build, and monitor a portfolio. It's a commonsense guide that should grace every investor's shelf."
—Ted David, Senior Anchor for CNBC Business Radio

"There's nothing Morningstar doesn't know about mutual funds. And at last, for ready reference, there's a book. You'll find everything here you need to know about managing fund investments, inside or outside a 401(k)."
—Jane Bryant Quinn, Newsweek columnist and author of Making the Most of Your Money

See all Editorial Reviews

Product Details

• Paperback: 304 pages
• Publisher: Wiley; 2 edition (October 26, 2007)
• Language: English
• ISBN-10: 0470137533
• ISBN-13: 978-0470137536
• Product Dimensions: 5.7 x 0.9 x 8.7 inches
• Shipping Weight: 12.8 ounces (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (16 customer reviews)
• Amazon Best Sellers Rank: #474,156 in Books (See Top 100 in Books)

More About the Author

Christine is Morningstar's Director of Personal Finance, a position she has held since early 2008. In that capacity, she writes and edits a monthly newsletter, Practical Finance, which advises do-it-yourself investors on every aspect of the financial-planning process. She also writes a weekly column, "Improving Your Finances," on Morningstar.com, and was the creator of Morningstar's "The Short Answer" column, which is geared toward investors just starting out. She is widely quoted in the media, including the Wall Street Journal, The New York Times, and MarketWatch, and has been a frequent guest on CNBC, PBS' Nightly Business Report, and Fox Business News.

Since joining Morningstar in 1993, Christine has been a central part of Morningstar's effort to deliver quality financial investment information to Morningstar's 6 million-plus clients. As an analyst and editor, she has served as Morningstar's director of mutual fund analysis. Prior to assuming that position, she was editor of Morningstar Mutual Funds and Morningstar FundInvestor. Christine co-authored the company's first book, "The Morningstar® Guide to Mutual Funds: 5-Star Strategies for Success," a national bestseller published by John Wiley & Sons in 2003, and was the lead author of the book's second edition, which was published in 2005. Christine's newest book, "Morningstar's 30-Minute Money Solutions," which provides readers with the necessary guidance in tackling money challenges and building a comprehensive financial plan in easy-to-manage increments, is set to be released by John Wiley & Sons in January 2010.

Christine holds a bachelor's degree in political science and Russian/East European studies from the University of Illinois at Urbana-Champaign. She lives in the Chicago suburbs with her husband, Greg. She is an avid cook, a political junkie, and a long-suffering Chicago Cubs fan.

Customer Reviews

Most Helpful Customer Reviews

48 of 55 people found the following review helpful:

3.0 out of 5 stars Good book, but I would recommend another., February 11, 2006

By 

Buffy (Sunnydale) - See all my reviews

This review is from: Morningstar Guide to Mutual Funds: Five-Star Strategies for Success (Hardcover)

This book provided a good broad-based overview of mutual funds and endorses modern portfolio theory. The idea being that a properly allocated portfolio of mutual funds with a focus towards long-term investing will work the best for most investors building their retirement savings. Properly balanced over the years, this style will work better than that of active investors trying to chase hot funds and time the market since very few active managers succeed over the long haul.

If you were to look at a "Top 10" performing mutual fund from 10 or 5 years ago, chances are it isn't a Top 10 fund anymore so you shouldn't buy into the hype of today's current "hot fund". If it were such a solid fund, shouldn't it be a solid fund 10 years later? But this book and similar ones feel that while an active investor and a hot fund may have one good year, they probably have bad years as well, and they probably can't keep up their above-average performance over 30 years.

I read this book along with "All About Asset Allocation" by Richard Ferri and "The Only Guide to a Winning Investment Strategy You'll Ever Need: The Way Smart Money Invests Today" by Larry Swedroe all of which cover similar ground (an overview of mutual funds, an overview of modern portfolio theory). My favorite is the Swedroe book because of it's straightforward reading style, and it goes a little more in-depth than the Morningstar book.

The Morningstar book only gets 3 stars because unfortunately Morningstar has a product to sell: namely, Morningstar itself. Morningstar makes money buy getting you to use their services (such as their web site) and rely on their ranking system and advice all of which comes through in this book. Morningstar's 5-Star ranking system can create some of the problems Hot Top 10 Funds lists create: they tempt everyone into thinking if it's a 5-star fund it HAS to be good so why not buy the hot 5-star fund that posted a 30% return last year? Why would anyone buy a 5-star fund with a 12% return? But not all of Morningstar's 5-star funds stay 5-star funds so you have to look past the hype when deciding for yourself if a fund is good for you for the next 5, 10, 20 years. The book was okay but be mindful of the Morningstar product placement. The Swedroe book gets my recommendation.

20 of 21 people found the following review helpful:

5.0 out of 5 stars I'd give six stars if I could!, June 25, 2006

By 

blackstripe - See all my reviews

This review is from: Morningstar Guide to Mutual Funds: Five-Star Strategies for Success (Hardcover)

This book is clear, concise, and effective. I've read the first four chapters so far, and it has explained everything I've wanted to know about choosing mutual funds. I was absolutely ecstatic when I saw that the chapter on mutual fund management has an overview of the pros and cons of a number of the well-known fund companies.

One of the reviewers was complaining that this book relies too heavily on Morningstar research. Well, first of all, Morningstar is one of the premier analysis firms in the industry, and as such they have a wealth of great information. Secondly, I have yet to see a place in the book where they ask you to pay for anything. A good portion of the Morningstar website is free, and the book mentions a Morningstar mutual fund book you can get from public libraries. The reviewer also complains about the Morningstar 5-star rating system. The book explains that the star ratings can be used as a screening tool, and stresses the many other factors that should be considered when evaluating a fund. When used in conjunction with other objective criteria, the star rating is a powerful tool to evaluate past returns and volatility.

With all of this in mind, if you are absolutely new to investing, you should become familiar with certain basic investing terms and concepts before reading this book. I highly recommend either The Wall Street Journal's Complete Guide to Personal Finance or The WSJ's Complete Money and Investing Guidebook. For most people, I would say the Guide to Personal Finance would be a good primer.

10 of 12 people found the following review helpful:

5.0 out of 5 stars Very comprehensive, January 9, 2007

By 

Dennis McCroskey "dennismc" (Mendocino, CA USA) - See all my reviews
(REAL NAME)   

This review is from: Morningstar Guide to Mutual Funds: Five-Star Strategies for Success (Hardcover)

The book reads somewhere between a text book and a general description of mutual funds and bonds. I found it to be very informative, well organized and believe I have a much better understanding of how mutual funds work. Also, Crhistine is pretty cute.