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I Think I Get It

Making sense of the dreaded prospectus

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This story appears in the January 2002 issue of Entrepreneur. Subscribe »

When it comes to a good time, reading a mutual fund's prospectus doesn't top anyone's list. But it's the only document that tells you the fund's fees and expenses, what it may and may not invest in, who manages it and how they do it, how to buy and redeem shares, and much more must-have knowledge. Maybe you'd rather read Harry Potter, but the prospectus is more important.

Tom Lemke and Gerald Lins help you with the task in their book, How to Read a Mutual Fund Prospectus (Mercer Point Press). The authors, attorneys specializing in mutual funds and investment management, say they wrote the book for their mothers. "Our mothers could understand a prospectus if they knew where to look," Lemke says. "But like most people, they were intimidated by the document."

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