Industry Research

Q How should I learn about an industry to invest in it? — P.L., Las Cruces, New Mexico A The best way to learn about any industry is to read a lot about it — though don’t expect to understand all of what you’re reading at first. Just stick with it. Note that some industries (such as consumer products and retail) can be fairly easy to understand, but others (such as biotechnology, semiconductors and financial services) can be quite complex.

Perhaps start with websites of companies in the industry and trade associations. Read books on the industry or companies in it. There are gobs of online articles to digest, too, from sites such as Fool.com. You can get research reports from many brokerages on lots of companies, prepared by Wall Street professionals. Read annual reports of companies in the industry, which include comprehensive 10-K reports.

Ideally, learn some accounting basics, too, so that you can make sense of companies’ financial statements.

*** Q

I’m invested in a mutual

fund with a 4.75% frontend load. Should I sell out of it and move that money to a noload fund? — D.R., Kenosha,

Wisconsin

A

No-load funds — of which

there are thousands — are generally preferable to funds with loads (sales charges). In this case, though, you already paid that fee up front when you bought your shares. So at this point, forget the load and simply decide whether you want to keep the fund based on your performance expectations for it. However, do check out its expense ratio (annual fee). Many good funds charge less than 1%, and some index funds are charging less than 0.10%. There are plenty of outstanding no-load funds.

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