People who sell you mutual funds tell you a lot of things about the fund they want you to invest in, but therere several items about the mutual fund nobody wants to tell you.  So please look at these items when you are thinking about investing in a mutual fund or if you already have money invested in a mutual fund.

Does the funds performance guarantee that performance in the future?  Just because a fund has done well over a one, three or five year peroid.  It is, as the disclosure says, no indication of future performance.  Now dont take this wrong, it doesnt mean all fun performance figures are worthless, a manager who has a good job over a long period of time probably is a good manager but just remember that performance figures need to be taken with a grain of salt you need to look at the overall mutual fund when determining if youre going to invest in it or stay invested in it.

Does the fund manager have his own money invested in the fund.  In a nutshell does he put his money where his mouth is.  Trying to find out whether the manager is invested in the fund does take a little bit of research.  Warren Buffett holds 99% of his wealth in Berkshire Hathaway, that says something to wear his loyalty lies.

Traditional managers tried to manage their risk by buying securities when it made sense or staying on the sidelines in cash when things didnt make sense.  Now days there all sorts of systems that people at mutual fund companies do to manage their investments, but in most cases theyre required to stay in the area that they are working. For example small-cap Stays in small-cap, mid Stays in mid-Large Stays in large-cap this might not necessarily make sense if the market is hurting one or several of those areas.

Is there a conflict of interest between the mutual fund and your investment goals.  If you want to make a good return on your investment fund manager wants to make the fund date because he gets paid as a percentage of the assets under management.  As new money comes in managers must continually be searching for new investments they struggle to find enough good opportunities for all that cash and then they end up getting smaller and smaller returns.  If a fund puts investors first, they will shut down the mutual fund to new money when the fund is still relatively small.  Some do this but plenty of others dont try to see if the fund is still expanding or if its a closed end fund were no new investors are allowed in.

Last but not least, what are the funds total fees.  If a fund trades a lot the expense ratio might be fairly high.  The higher the funds turnover the worse it will be, a turnover of 100% means the fund churns through its entire portfolio each year.  The advisor selling the fund to you may get a commission sometimes in the 5% range, if you sell the fund they may charge a backend sales fee, another fee called the 12B-1 which is for the funds marketing costs could be part of the funds expense..