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OnlineHost: Copyright 1996 America Online, Inc. All Rights : Reserved. OnlineHost: Center Stage is the largest gathering place on the : service, bringing celebrity guests right into your : home, and offering a host of entertainment events : led by a team of talented emcees. It's capable of : accommodating thousands of guests and is truly the : showplace of the America Online service. OnlineHost: Experiment with the menu. You'll find many powerful : options including one which permits you to interact : with other members present in the Auditorium. The : interaction "rows" text is prefaced by a number : shown in parentheses: (1), etc., which is followed : by the text sent by members in that row. Unless a : "row" is being "broadcast" your hosts cannot see : interactive text. Try it. You can't break anything! OnlineHost: To interact with your hosts or their guests, use : the Interact Button and select either "Ask a : Question" or "Send a Comment" -- please be aware : that your hosts may not be able to address all : items sent to the stage due to time constraints. : Questions or comments sent that are not relevant : to the conference in progress will not be : addressed in order to save you time and charges. OnlineHost: Your Emcee for this event is Jill LE (AOLiveMC 3) OnlineHost: If you've ever wanted to learn about the hottest : mutual fund investments, stay with us! Gene : Walden, author of "The 100 Best Mutual Funds to : Own in America" is taking your questions about : mutual fund investing. AOLiveMC3: Welcome, Gene Walden! We are delighted to have you with us in Center Stage. GWalden100: It's great to be here again! AOLiveMC3: Welcom RealGL too from our Real Life dept! RL Gal: I'm your "Real Life" Host, Christy Heady (RLGal) ... AOLiveMC3: RLGal,would you like to introduce your guest? RL Gal: Many thanks to Gene Walden for being our guest tonight ... RL Gal: Gene Walden is the author of TWO Best Selling Books ... RL Gal: #1 "The 100 Best Mutual Funds to Own in America" , which we'll talk about tonight. RL Gal: And... RL Gal: #2 "The 100 Best Stocks to Own in America". Both great resources of fin'l information! RL Gal: Gene, welcome to America Online's "MainStage" and "Real Life." GWalden100: Thanks. It should be great fun. RL Gal: Our first question comes from a lot of inquiring minds... RL Gal: What is the #1 mutual fund in America today ... and how did you make the pick? GWalden100: I#1 is the T Rowe Price Science and Technology Fund. GWalden100: It has had annual average return of about 25 percent per year the past five years, and has GWalden100: been very consistent. Question: Gene,what do you believe caused the drop in the market the last two days? GWalden100: The main reason is the bickering in Washington over the new budget... GWalden100: I think once that is finally resolved, you'll see the market return to its bullish ways... GWalden100: You'll also see the Fed start lowering interest rates, which should also move the market GWalden100: up. Question: Why would someone invest in a mutual fund rather than in an individual stock? GWalden100: Mutual funds are so easy to buy and hold. You make one decision, and let the mutual fund GWalden100: manager do the rest. Plus with a mutual fund you get instant diversification. So with one GWalden100: purchase, you suddenly have a portfolio of dozens of stocks or bonds. Question: In light of the upcoming presidential electtion, would you advise purchasing funds Question: dedicated to zero coupon bonds? RL Gal: $good question. GWalden100: Not really. I'm not a big fan of zeros, nor of bond funds in general, although bond funds GWalden100: do best as interest rates are dropping. Question: Gene, can you give us your top 3 buys for the week? Your top 3 sells? Why? GWalden100: I don't have any sells this week, but I would be moving some money into international GWalden100: mutual funds such as the India Fund, The Newport Tiger Fund and perhaps a Latin American GWalden100: fund. Question: Would you advice buying Stein Roe's Young Investor Fund for a child as young as two years Question: old? GWalden100: No Stein Roe funds made my top 100 list, nor even my honorable mention, although it is a GWalden100: very fine company. However, it's never too early to start buying mutual funds for kids. Question: Which International Funds do you think will be the best to own in 1996? GWalden100: I just mentioned a couple of funds I like. Also look for the GAM International Fund to GWalden100: do well, and the Merrill Lynch Global Allocation Fund. RL Gal: Gene, besides Newport Tiger and the other int'l funds you mentioned, RL Gal: are there certain regions of certain countries, perhaps in emerging markets, RL Gal: you favor? GWalden100: Asia and Latin America were down somewhat GWalden100: this year, and even Europe was well off the U.S. pace so any of those areas could show som GWalden100: good growth this year. Question: Where should I be putting my retirement money in 1996? GWalden100: Stay diversified, particularly with your retirement money. In terms of mutual funds, you GWalden100: should have some money in broad growth fund, an aggressive growth fund, perhaps a growth GWalden100: and income fund and an international fund or two. Question: If you were going to invest $5000 tomorrow where would you put it and why? GWalden100: I'd put about half of it in the Fidelity Contrafund, because that's a fund that's always GWalden100: looking for bargains -- important in this market -- and I'd put the other half in an GWalden100: international fund such as the GAM International. Question: What are good eco funds. I want to open an SEP, but am looking for "green investments". GWalden100: There's a Calvin Fund that's been pretty good, but none of the ethically pure funds made GWalden100: my top 100. However, the Wasatch Aggressive Equity Fund, which ranks #2 in my list GWalden100: has a very ethically pure portfolio. Question: What's your view of internet stocks like spyglass and sunmicro? Are tech skewed funds Question: still a good investment? GWalden100: High tech is pretty high right now. It's not an area I would concentrate a lot of money GWalden100: in, but if you stay diversified, certainly some of your dollars should remain in hi tech. Question: Are there any Mutual Funds that let you start out with an initial investment of less than Question: $500? GWalden100: Yes, there are some that start as low as $250, though I can't rattle them off the top of GWalden100: my head. I believe 20th Century and Invesco are among the lowest in initial investment GWalden100: requirements. Some funds will let you start with as little as $50 if you enter an automa GWalden100: checking deduction plan. Question: What is your assessment of the Neuberger/Berman Line? I used to have Some of their Question: "Selected Sectors", formerly called "Energy Fund?" Are they a strong group? GWalden100: None of the Neuberger funds made my top 100, but they did slip into my honorable GWalden100: mention list. Question: Is Columbia Healthcare stock a good investment? GWalden100: Yes, that's one that has shown strong growth the past few years, and seems to be GWalden100: poised for continued growth. Question: Gene, Your expertise needed. Is Vanguard SPHealth good for the long term? I've held it Question: for seven years so far. RL Gal: How does a fund qualify for your Top 100 list? GWalden100: Healthcare funds are going to be a bit volatile, but they remain a great long-term GWalden100: investment because of the aging population, and the increased emphasis on health. I GWalden100: really think the health area will be one of the biggest growth sectors for years to come. GWalden100: The other question was how did I select the top 100 stocks... RL Gal: $wow, he's goooood. GWalden100: I looked at 5-year growth, consistency over those five years, and management... GWalden100: The best funds are those that have a great track record and still have the same GWalden100: fund manager who established that track record. Question: Gene, I currently have 11 mutual funds, 6 are iras and 5 are cash funds as well as a money Question: market fund do I have too many funds or what? GWalden100: For sure.... GWalden100: Get rid of some of the cash funds... GWalden100: You need maybe one cash fund or money market, and then most of your money should go GWalden100: in stock and growth and income funds. Question: WHAT ARE THE BEST 3-5 FUNDS TO INVEST $50,000 IN AND NOT THINK ABOUT FOR 3-5 YEARS? GWalden100: Here goes: GWalden100: T. Rowe Price Science and Technology, Wasatch Aggressive Equity, Kaufmann Fund... GWalden100: Fidelity Contrafund, and for the sake of global diversification, the GAM International Fun Question: Are there any mutual funds that buy options,leaps,or futures? RL Gal: $Gateway, I think re: options. GWalden100: Many funds do that as a form of insurance, but I prefer funds that keep that stuff to a GWalden100: minimum. Afterall, if I'm buying a stock fund, I want stocks -- not options and futures. Question: A lot of market commentators lately have been saying that internet stocks are scary Question: because they are almost impossible to value like most companies that make physical goods. Can you Question: comment on this? GWalden100: That's true of a lot of high tech related stocks. These are stocks you buy on faith... GWalden100: Some will do great, others will bomb, but if you keep add it, and continue to buy, you GWalden100: will end up with enough winners to provide excellent long-term returns. Question: How many funds should an individual hold in order to have a well diversified portfolio of Question: funds, considering an investment of approx. $25,000.00? GWalden100: I think 4 to 6 funds of different types (growth, aggressive growth, hi tech, international GWalden100: income, etc.) is plenty. Question: what is your favorite family of funds GWalden100: I have a few. Fidelity had about 20 of my top 100 funds, 20th Century also did well as GWalden100: did Invesco. Question: Gene, is your #1 pick of T. Rowe Price Science & technology a loaded fund? GWalden100: No. It's a no-load, with a minimum initial investment of $2,500. RL Gal: Gene, are no load funds ALWAYS better than load funds? GWalden100: No way... RL Gal: Do tell....... :) GWalden100: I prefer no-loads if the past the past performance is equal to a load fund, but I would GWalden100: always take a good load fund over an average no load. Question: Gene, please comment on people's eagerness to buy gold funds. What do you think about Question: gold's risk right now? GWalden100: Gold is non-performing asset. I can keep the same price for years without ever moving -- GWalden100: and it has... GWalden100: So I don't care for gold. And right now, with inflation at a low level, I don't think GWalden100: gold is going anywhere. Question: what is the difference between front end loads and rear end loadsas well as no loads GWalden100: With a no load you pay no commission to buy or sell your fund shares.... GWalden100: With a front end load, you pay a commission of 3 to 8.5 percent up front.... GWalden100: And with a back end load fund, you pay that commission when you sell your shares... GWalden100: But most back end load funds drop the load if you hold for a few years. Question: Is your mutual fund book available in the online bookstore? GWalden100: Not that I'm aware of. Question: Gene... I see that the China Closed End fund was up 22% last week, followed by several Question: other internationals up more than 15% last week alone... some open end funds... RL Gal: But you can request his book in the online book store for them to order it. RL Gal: We're talking with Gene Walden, author of "The 100 Best Mutual Funds to Own in America". GWalden100: I didn't see the end to the China Fund question. Question: Right now I'm in a Mutual Fund called Aim Constellation, I'm just getting started and have Question: lost about 129.00 what should I do? RL Gal: Moving on.... GWalden100: AIM Constellation is a great, great fund, but nothing goes straight up... GWalden100: If you are a long-term investor, as you should be, stick it out. You'll do just fine. GWalden100: Getting back to the China fund question... GWalden100: I've said for weeks now that international is going to move this year. I'd stay in that GWalden100: Asian market, and maybe even add some more to it. Question: What is the best investment deal for a 18 year old GWalden100: For an 18, get in an aggressive growth stock fund such as the Kaufmann Fund or the GWalden100: Wasatch Aggressive Equity. They will be great funds for the long-term, with some AOLiveMC3: We have time for one more question GWalden100: volatility from time to time, but an 18-year-old doesn';t have to worry about the short GWalden100: term. RL Gal: Gene, with it being a Presidential Election year, are there certain funds... RL Gal: that may NOT do well? GWalden100: Not necessarily... GWalden100: I think stocks will continue to do well because of the election. Clinton will want to ... GWalden100: keep the economy moving, and Fed will start lowering interest to insure that, so I think GWalden100: stocks in general should continue their climb. And after these last two bad days, there GWalden100: may be some bargains in the market. AOLiveMC3: Christy, you and Gene have a closing statement?? GWalden100: This has been great. AOL has some very astute investors. It's been real pleasure for me. RL Gal: I would like to let our audience know that this chat transcript will be available.... RL Gal: tomorrow in the Real Life personal finance forum ... KEYWORD: Real Life. RL Gal: Thank you, Gene, for being our guest and sharing your time with us! AOLiveMC3: Thanks to Both Christy from "Real Life" and their Guest Gene Walden, for a most informative event. GWalden100: Anytime. Thank you. AOLiveMC3: Audience, your questions were excellent! AOLiveMC3: Folks, we are out of time for this evening, thanks for joining us. OnlineHost: Copyright 1996 America Online, Inc. All Rights : Reserved. RL Gal: On behalf of Real Life, thanks to our host, AOLiveMC3 and our audience for asking RL Gal: such great questions!