While Mutual Fund Investing Has Exploded Over The Past 50 Years To Become One Of The Most Popular Forms Of Investing Anywhere, There Are Still Possible Pitfalls That You Can Fall Into If Youre Not Careful. Investing Is Still A Risky Business, Even If Everyone Is Doing It. Here Are Some Tips To Help You Through Any Problems You Might Have.One Common Criticism Of Mutual Fund Investing Is That They Dont Have A High Enough Return On Their Investment And That Index Funds, Which Arent As Popular Have Historically Returned A Higher Investment Than The Much More Popular Actively Managed Mutual Funds. A Second Common Problem That Some Have With Mutual Fund Investing Is The Use Of Load Funds. You Have Probably Seen The Phrase No-load Mutual Fund In The Newspaper Or On Television. The Reason The No-load Type Of Fund Is Preferred Is Because Load Funds Come Loaded With Fees. These Fees Can Run Anywhere Between Half A Percent, All The Way Up To 8.5 Percent Of However Much You Chose To Invest. Its Thought That These Fees Are A Clear Conflict Of Interest As They Clearly Benefit The People Making The Sale And Hurt The Person Making The Investment. Load Mutual Funds Are Also Thought To Make Your Broker Recommend Funds That Will Maximize His Fee, And Not Your Investment Portfolio.Some Investors Also Point To A Perceived Conflict Of Interest In Regards To The Size Of The Mutual Fund. Most Companies That Manage The Mutual Fund Charge A Fee Of Between Half A Percent Up To Two And A Half Percent Of The Total Amount Of The Funds Assets. Its Thought That This Fee Could Cause A Fund To Spend More On Advertising Than Is Actually Needed So That They Can Get More People To Invest In The Fund And Maximize Their Fee As Much As Possible.The Mutual Fund Market Isnt Immune To Scandals, Either. In 2003, A Scandal Involving The Practice Of Unethical And Dishonest Trading Practices. Many Funds Were Found To Have Participated In Late Trading And Market Trimming, Both Of Which Are Illegal Practices. You Obviously Dont Want To Invest In A Mutual Fund That Is Engaged In Illegal Activities.Mutual Fund Investing Is Gaining In Popularity On An Almost Weekly Basis, And A Few Bad Eggs In The Business Wont Ruin It For Everyone. However, It Is Always Good Advice To Enter Into Any Kind Of Investing With Your Eyes Open, And If You Feel Your Mutual Fund Is Behaving Improperly, There Are Authorities You Can Report Them To.
