I've been investing in Mutual fund for as long as I've been working. I used to look up all the mutual funds my company offer, picked the ones with best returns and tried to diversify as much as possible. So far that strategy worked pretty well for my 401k. It was pretty easy since my company would offer only a few funds to choose from.
Investing in mutual funds with my savings is a different story. The goal is different and the amount invested in is different.
Fool.com's article on Mutual fund suggests this strategy
"BUY AN INDEX FUND"
Why? The article states that most "managed" funds have higher cost and 90% underperform an index fund. Hey that sounds good enough of a reason for me. I have seen a lot of mutual funds underperform myself. Sure, the market can go down, but history shows that it goes up, and beats inflation.
Different Kinds of Funds:
Bond Funds: Just bonds. Kinda like a bond with interests.
Balanced Funds: Bonds + stocks, about 50/50.
Stock Funds: Stocks, could be based on company size or category (value, income-based, etc)
International/Global Funds: Companies with homes with value beyond those of US
Sector Funds: such as financial, computer, whatever industry
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