Investors may typically pay a fee when they buy or sell their shares in fund, and those fees in part pay salaries and expenses of professionals who manage fund.

Even small fees can and do add up and eat into a significant chunk of returns a mutual fund is likely to produce, so you need to look carefully at how much a fund costs and think about how much it will cost you over amount of time you plan to own its shares. If two funds are similar in every way except that one charges a higher fee than other, you'll make more money by choosing fund with lower annual costs.

Past performance is not a reliable indicator of future performance. So don't be dazzled by last year's high returns. But past performance can help you assess a fund's volatility over time.

Making any sort of investment involved a certain amount of risk so it is always wise to seek advice of a professional before making any decisions.

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They lie about any aspect of business: claim past or future profits that do not exist, claim it has contracts to sell its products when it doesn't, or make up fake numbers on their finances to fool investors.

The brokers who sell company's stock manipulate price so that it doesn't reflect true value of company. After they pump up price, these brokers dump stock, price falls, and investors lose their money.

For whatever reason, you have to sell your investment when market is down.

Making any sort of investment involved a certain amount of risk so it is always wise to seek advice of a professional before making any decisions.

You may freely reprint this article provided author's biography remains intact: