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