Mutual Funds

By investing in mutual funds, you can put expert money managers to work to help you achieve your financial goals.

Before investing, you'll want to understand the basics of mutual funds. Simply put, a mutual fund is a company that makes investments on behalf of its shareholders. The fund pools the money of many people who have similar investment objectives. Professional money managers then take the pool and invest it in securities such as stocks, bonds and money market instruments.

Mutual funds can make money for you in two ways. One, they can pay dividends earned from the funds' investments. And two, as the value of the securities held by the fund increase, your shares increase in value.

As a shareholder, you own a proportionate share of the fund. Each share represents ownership in all the fund's underlying securities. Funds pay dividends and capital gains in proportion to the number of fund shares owned. Thus, both large and small shareholders get the same rate of return.

You need to be aware that investment return and principal value of an investment will fluctuate. Shares, when redeemed, may be worth more or less than their original cost.

Types of Mutual Funds

There are funds for investors that may fit just about any investment need.

Growth Funds typically invest in stocks and seek capital growth through price appreciation of the securities held in their portfolios. Their primary aim is to produce an increase in the value of their investments rather than a flow of dividends. Growth funds with a more aggressive focus seek maximum capital gains as their investment objective. These funds may invest in stocks that are somewhat out of the mainstream- such as smaller, lesser-known companies that managers believe possess dynamic potential.

Growth and Income Funds invest primarily in the common stocks of companies with longer track records. These funds seek equities with a higher share value that also maintain a solid record of paying dividends.

International Funds seek growth in their investments and invest primarily in stocks of companies located outside the U.S*.

Global Funds typically seek growth in the value of their investments and generally invest in stocks and/or bonds traded worldwide, including the U.S.

Sector or Theme Funds seek to capitalize on the return potential provided by investing primarily in a particular industry or sector of the economy++.

Balanced Funds seek a high level of current income, which is often achieved by investing in common stocks of companies with good dividend-paying records. They may invest in such fixed-income securities as corporate and government bonds. Some income funds maintain more aggressive objectives.

Bond Funds invest primarily in various types of bonds, and may include some stocks also.

* Investing internationally has specific risks such as changes in currency rates, foreign taxation and differences in auditing and other financial standards.

** Greater volatility is inherent in funds which concentrate their investments in one economic sector or geographical region.

Securities and Insurance Products:

Not Insured By FDIC or any Federal Government Agency

May Lose Value
Not a Deposit of or Guaranteed by the Bank or any Bank Affiliate

Securities and insurance offered through INFINEX INVESTMENTS, INC., member FINRA and SIPC. INFINEX INVESTMENTS, INC. is not associated with Farmers & Merchants Bank. Farmers & Merchants Financial Services, Inc. is a non-bank affiliate of Farmers & Merchants Bank.

205 S. Main St.     P.O. Box 1111     Timberville, VA 22853     (540) 896-8941