By Nellie S. Huang
From Kiplinger’s Personal Finance
We get it: No one wants to read a fund prospectus, and few investors ever do.
“I can tell you precisely how many clients read the prospectus: zero,” says Lew Altfest, chief executive of Altfest Personal Wealth Management.
But reading a fund’s prospectus is an important step in making a good investment that’s right for you. The trick is to focus on specific bits of information about a fund that are listed in the prospectus. Here’s what to look for: Investment objective Typically just one sentence long, the fund’s objective is usually found at the beginning of the prospectus. Often, a fund’s aim is focused on either growth (capital appreciation) or income (capital preservation), or sometimes a combination of the two. That matters because it can be a clue to how much risk the fund takes….