Mutual Funds 101 (5)
What is a mutual fund and why would you ever want to buy one? Funds put of investments--usually stocks--together in a package that's pretty easy to buy, hold or sell. They're a simple way for someone who doesn't have a lot of money or experience with the stock market to take advantage of stock market returns.

Buying a Mutual Fund (7)
You can buy a mutual fund from a bank, broker or directly from a mutual fund family. A bank offers convenience, a broker the feeling of security that you're making the right investment and a fund family offers a way around fees.

Fund Fees (5)
How can you tell which fees are normal and which are outrageous with a mutual fund? Some funds charge a load or sales charge when you buy or sell, but you can avoid them with no load funds. All funds have a management fee; try to find one under 0.5%. Avoid funds with 12b-1 fees.

Mutual Fund Taxes (5)
If your mutual fund is in a retirement account, you don't have to worry about taxes until you take the money out. Otherwise, you have to think about long-term and short-term capital gains taxes for when you sell a fund or when your manager sells an investment within a fund. Pay lower taxes with index funds.

Load and No Load Funds (5)
Brokers may try to sell you load funds to earn a commission. But you can invest in mutual funds without paying a load or sales chage. Go to a no-load fund family and buy direct.

Stock Funds (7)
Not all mutual funds invest just in company stock. Investors buy stock funds when they are willing to take a bit of risk in return for the hope of making more more. Stock funds offer a mix of growth (that is, of your money) and risk. You could lose money, too.

Bond Funds (5)
Bond funds invest in bonds, also known as debt securities. Bond funds are usually safer than mutual funds that invest in stocks, but they also offer lower returns. Funds can buy bonds that range in risk from those issued by the federal government (the safest) to those issue by companies with bad credit, known as junk bonds.

Money Market Funds (5)
Money market funds are good for safe, short-term purposes because they can only buy certain high-grade investments. They aren't guaranteed like your bank account--and some were at risk in the recent economic crisis.

Balanced Funds (5)
Balanced funds combine stocks, bonds and sometimes other investments in one easy to use package for investors. Balanced or hybrid funds offer a middle ground of moderated risk and slower growth all in one mutual fund.

Index Funds (6)
Index funds just buy all of the companies in an index. The manager doesn't try to find the winners or losers. They buy everything. That doesn't sound like a winning strategy, but it often is. Index funds have low expenses, low taxes and often beat stock-picking managers in the long run.

Target Date Funds (5)
Target date funds are a popular type of balanced fund that invests for people retiring around the same time. Managers of these mutual funds, which are also known as lifecycle funds, move the money from high-risk, high-return investments such as stocks to low-risk, low return investments like bonds as retirement nears.

Sector Funds (7)
Sector funds only buy companies in a particular industry, such as technology or healthcare. These highly concentrated portfolios are great when the sector is hot, but ruinous when the industry crumbles.

Funds by Company Size (5)
Different-sized companies do better in different parts of the economic cycle. Some investors are partial to small companies with a lot of potential for growth, while another camp favors big established names. Some funds only invest in companies of a certain size: big, little or in the middle.

Judging Fund Performance (6)
You have to hold different types of mutual funds to different standards. Historically, the stock market returns 8-10% a year, but stock funds can be aggressive or safer.

Managing Your Funds (7)
What are you saving all that money for? That will tell you how to invest it. The closer you get to when you plan to spend your money, the safer investment you should choose. Long-term investments--like retirement--need more juice.