| Since the mid 1980's, the market of the | | | | of the laws, some fund managers are forced to |
| Mutual Fund industry has grown continuously. | | | | invest in many different stocks due to the |
| Billions of dollars has been invested into | | | | size of their funds. Some fund managers are |
| the Mutual Fund Industry. Unfortunately, not | | | | forced to buy poor quality stocks. |
| all of investors make money. Therefore, it is | | | | |
| important for you to study a mutual fund | | | | Be Careful Of Fund Overlap: Many investors |
| carefully before investing. Here are some | | | | try to diversify their investments by placing |
| tips that can help. | | | | their money in different type of funds. |
| | | | Unfortunately, they will be surprised to know |
| Stay Away From Poor Performance Funds: It is | | | | that many stocks held by one fund are also |
| important to look at the history of the | | | | held by the other funds. Some investors end |
| mutual funds. If it has been bad for awhile, | | | | up investing in the same stocks over and over |
| it is probably not for you. The average | | | | without knowing. |
| investor will sell a poor performance fund to | | | | |
| find best performing fund. | | | | Investors who have over $100,000 of |
| | | | investable assets should separate their |
| Over-Diversified Funds Are BAD: Mutual funds | | | | investment accounts. Separate accounts allow |
| are regulated by law to diversify seventy | | | | investors to have greater control over taxes |
| five percents of their assets. They should | | | | and security. Furthermore, these accounts are |
| not have more than five percents of the | | | | usually managed by highly professional fund |
| portfolio in a single security. As the result | | | | managers. |