| There are thousands of mutual funds available | | | | Taking advice from a banker: Are you blindly |
| to investors. While some are good and can | | | | taking the advice about what mutual funds to |
| outperform the market, many consistently | | | | invest in from your local banker? Chances |
| underperform the market. Generally, this is | | | | are, he's trying to get you to invest in a |
| because the mutual fund is too large and the | | | | mutual fund with a load, so he can get a |
| manager can not efficiently invest all of the | | | | kickback. There's nothing wrong with talking |
| money, the fees are too high, or the mutual | | | | to someone from your local bank about |
| fund manager is not talented enough to beat | | | | investing, but always do your own research |
| the market. Here are some key warning signs | | | | and never agree to anything then and there. |
| to look out for when investing in mutual | | | | |
| funds. | | | | Investing in the hottest mutual funds: : |
| | | | Just because a mutual fund is succeeding now |
| Loads and 12-b1 fees: : These are extra | | | | does not mean it will succeed in the future. |
| "marketing" charges a mutual fund lays on | | | | It may have just gotten lucky by being |
| investors. Never invest in mutual funds that | | | | focused on a particular sector type that had |
| have these fees. These fees represent | | | | a good year. Furthermore, mutual funds that |
| kickbacks and marketing expenses for the | | | | perform well tend to get a fload of assets |
| mutual fund to expand its investor base. Not | | | | invested in them, which then makes the mutual |
| only does this represent an extra expense to | | | | fund too bloated. |
| you, funds that are actively attempting to | | | | |
| expand will perform worse in the long term | | | | Roger is a writer for Research Mutual Funds, |
| due to having too many assets under | | | | a site that can help you find mutual funds |
| management. | | | | with top performance. |
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