Since the mid 1980's, the market of the Mutual Fund industry has grown continuously. Billions of dollars has been invested into the Mutual Fund Industry. Unfortunately, not all of investors make money. Therefore, it is important for you to study a mutual fund carefully before investing. Here are some tips that can help.

Stay Away From Poor Performance Funds: It is important to look at the history of the mutual funds. If it has been bad for awhile, it is probably not for you. The average investor will sell a poor performance fund to find best performing fund.

Over-Diversified Funds Are BAD: Mutual funds are regulated by law to diversify seventy five percents of their assets. They should not have more than five percents of the portfolio in a single security. As the result of the laws, some fund managers are forced to invest in many different stocks due to the size of their funds. Some fund managers are forced to buy poor quality stocks.

Be Careful Of Fund Overlap: Many investors try to diversify their investments by placing their money in different type of funds. Unfortunately, they will be surprised to know that many stocks held by one fund are also held by the other funds. Some investors end up investing in the same stocks over and over without knowing.

Investors who have over $100,000 of investable assets should separate their investment accounts. Separate accounts allow investors to have greater control over taxes and security. Furthermore, these accounts are usually managed by highly professional fund managers.