Something In Common (1971)

I'm Chad Huntley. The film you're about to see refers to mutual funds. Since it has been produced by the underwriter of a specific group of mutual funds, it must conform to certain requirements established by law. One of these requirements is to make sure you understand that my participation as narrator does not constitute an endorsement by me of mutual funds or any particular mutual fund. I have no special knowledge about mutual funds. I'm not a shareholder of any fund. I have not made an investigation of mutual funds or of any particular fund. [Music] Listen, [Applause] you have a real good day, huh? >> I will. >> Take care. >> I'll call you about 4. >> Okay, bye. Bye-bye. >> Bye. [Music] [Applause] turning their attention to more pressing international issues and so goes the news. Now, let's take a look at yesterday's closing markets on the strength of a general upward trend. >> This is Jerry Martin salesman. >> On this particular day, he has an investment program that includes stock in Ford Motor Company and 112 other corporations. 5.35 representing a healthy game. [Music] This is Mrs. Sarah McCarthy, widow of 5 years. Mrs. McCarthy's investment program includes stock in Swift and Company, Sears, Robuk, and 109 other corporations. [Music] Meet Tommy Samuels, photographer. His investment program includes stock in Polaroid Corporation and 194 other corporations. [Music] >> So that's just about it. Now you take this stuff in here, all this stuff in here. Frank Baileyy's investment plan includes Continental Airlines, International Harvester, Gillette, and 104 other corporations. >> We can lose a lot of time. We can lose money. >> Jamie, this is a stethoscope. And what I'm going to do, I'm going to put this on your chest, and you take a deep breath. Okay. Does that hurt? Is it cold? >> Dr. Roy Mechum is a practicing physician. Also, he invests in a program that includes the Up John Company, General Electric, and 126 other corporations. >> Good care. [Applause] Virginia Electric is at 838, 100. Heat. Heat. [Applause] [Applause] [Applause] Over 30 years ago, Congress passed a piece of legislation that was unique in financial history. It has influenced the lives of a great many people, including the ones you have just met. That law is referred to as the Investment Company Act of 1940. The effect was to create a framework on which millions of Americans could plan their financial futures without having to rely entirely on their own experience and judgment. Under the guide established by this act, the investment industry can provide a means for the average American to obtain diversification in his investments and professional investment management. In other words, it made possible mutual funds as we know them today. [Music] >> Oh, thanks. Barb, I was just telling Jerry there's three choices that we have now in your Financial planning. >> Mutual fund is the popular name for a particular kind of investment company. Individuals who own shares in mutual funds are in effect pooling their money. The money is managed by full-time professionals who invest it in a variety of corporations. Some special purpose funds by long-term bonds, but the usual investment is in a large number of common stocks. The principle of the mutual fund is well known. It can be summed up in one word, diversification. Diversification simply means that shareholders money does not go into just one or even a few stocks. Instead, it is distributed among many stocks which professional managers believe exhibit desirable characteristics. Another plus is that diversification is possible not only in individual shares of stock but in mutual funds themselves. But in any case, the idea is to invest only in companies whose integrity and financial stability can be clearly established. Let's look at some of the companies that are represented in professionally managed mutual fund portfolios. The portfolios of the United Funds Group is a good example. This is a mutual fund group managed by Wadell and Reed of Kansas City, Missouri. Shareholders in United Funds Incorporated have put their money into investment programs that include stock in dozens of highly respected corporations whose products and services they encounter almost daily. In fact, you might say they have an interest in and are customers of these corporations. Their mutual funds investments allow them to share in the growth of the very companies they patronize every day. [Music] Yeah, [Music] yeah, yeah. [Music] [Applause] [Music] Christmas. [Music] Of [Music] [Music] course, a mutual fund portfolio may not contain all of these particular stocks at a given time. The trademarks you've seen and the corporate names mentioned represent some of the stocks in United Funds portfolios as of January 1, 1971. This election is only an example, but it is typical. Typical of the healthy, stable firms that are the main stays of American business. >> Well, I like the idea of my money working for me, but I'm really not sure I can afford to take the risk. [Music] Investments can be pretty chancy these days. You really never know what the market's going to do. That market ups and downs will occur certainly cannot be denied. The market is a living entity. It is never static, which is one of the reasons for diversification. By spreading investors money among large numbers of reputable firms, mutual fund management can usually reduce the impact of market changes in individual shares. So while diversification cannot eliminate the element of risk inherent in all types of investing, it does reduce it. It is not unusual for a mutual fund shareholder to own a portion of a portfolio that includes as many as 150 corporations in 20 different industries. This is the advantage of not putting all the eggs in one basket. This is diversification producing safety and numbers. Though the principle itself is not complicated, achieving diversification can be very complicated indeed because of the large number of securities on the market. To make an intelligent choice among all available securities becomes an almost impossible task for the average individual. He simply does not have the resources, the experience or the training. The mutual fund provides these factors. Obviously, fund management must be able to detect and analyze market trends quickly and wisely. So, another factor that helps reduce risk is professional management that is qualified to make a thorough investigation and do detailed research. Investigation starts first with a staff of trained and experienced analysts, individuals whose evaluation of securities is based on hard facts. These researchers depend on an extensive library, on the work of statisticians, and on dozens of outside sources or information that may throw light on the economic effects of domestic and international events. Outside sources may include general publications of various kinds, conversations with Wall Street specialists, and face-to-face interviews with representatives from a wide variety of industries. These field trips may in fact provide the analyst with insight that he could not obtain otherwise. At firsthand, he evaluates a firm's ability to cope with changing economic conditions. He estimates the company's competitive position and its potential for growth. Finally, the analyst may call on a computer to correlate current information with an enormous volume of supporting data. Of course, we have had only a glimpse of the market research that goes into the selection and management of a mutual fund portfolio. Actually, it is a job that often requires aroundthe-clock effort by full-time professionals working with the sophisticated tools of their trade. And it is all aimed at making it possible for the investor to take sensible advantage of our economic growth. Another question to be considered when we think of risk is what has been the long-term performance of our nation's economy? One look at a graph of the economic history of the United States shows that while the stock market continually and inevitably moves from peak to valley, month by month and year by year, the overall movement of our total economy has always been upward. Upward in the volume of goods we produce and market and therefore upward in the earnings of stockholders. Traditional American enthusiasm and a constant quest for a better way of doing things are behind this record. Yet, it is an astonishing fact that 95% of all the scientific knowledge we have today has come to us during the past 25 years. Finally, in considering risk, it is important to look at the future. The saying has never been truer. The best is yet to come. Experts say that over the long term we will enjoy continued growth in employment, in personal income, in the quantity and quality of the goods we produce. We will see unprecedented progress in space technology, in electronics, in transportation, and in countless other fields that contribute to our comfort and well-being. And who will be responsible for this growth? Well, many of the companies that have already contributed so heavily, the corporations that are today at the first line of research and development, and there will be new firms born of necessity and innovation. Some of them will become the giants of tomorrow. But perhaps the most important participants of all will be those who stand at the very foundation of America's economy. and you are among them. None of this can happen without you. You and the millions of others who because of their investment in their own futures have something in common. [Music] I'm Bill Rezner, president of What Ellen Reed. In producing this film, our company had a dual objective. First to salute the great American corporations that form the very foundation of our economy and secondly to salute the American family of investors who contribute to and benefit from the growth of these corporations. As a distributor and investment manager of one of the nation's largest group of mutual funds, we take pride in the fact that the investment portfolios of our mutual funds include such industrial stalwarts as those companies cited in this film. It is these companies and many others of like stature competing vigorously in a free enterprise system that have established this nation's unprecedented and almost unbelievable rate of industrial progress. For your family and mine, this has resulted in the most comfortable and productive living standard in the world. Our company also takes pride in the fact that we provide methods of investing that enable those in virtually all walks of life to participate in and benefit from the growth of these corporations. With you, the shareholders of our mutual funds, we look forward to a golden tomorrow.