Investing, for some, might be just a hobby, but it can sure be an expensive one. Yet, if you're like many of us, you know there are opportunities for putting your money to work and having it grow. Nonetheless, investing, like any business (and it is a business) has its own unique challenges. Her are what I consider to be top three.

1. Intelligently Deciding What to Buy

When it comes to Mutual Funds, there are today over 13,000 choices. You're going to check out each one, right? Yeah, right. And even for those you do check out, what are you going to look at? Past performance? What else can you look at? But as it says on bottom of every prospectus, past performance is no guarantee of future results. And in these days of cockeyed cooked books, past performance is barely a guarantee of past results! So you need to decide not only what to buy, but you have to be darn sure you know when to sell it when future results of an investment don't match your expectations.

Sure, there are investment rating services that provide a false sense of security to Buy & Holders. But fact is that pretty much every investment that rating services have touted over last few years has lost money. So much for depending on that sort of expert advice.

2. Determining When to Buy?

That's fine, however it's important to be aware that for every expert, there's an opinion and for every opinion there's an expert. I have a friend who says that opinions are like noses: everyone has one but you wouldn't live in anyone else's nose!

Around first of year, along with New Year's resolutions, come New Year predictions for what will be hot and what will not. As if that isn't enough to produce a massive case of information indigestion, now we have cable financial shows with pretty much opinion of hour.

What this is producing is a frenzy of buy and sell activity for stocks in general, and now for mutual funds as well. I don't think this approach serves either investors in particular or funds in general.

The big problem with this for mutual fund investors is that all experts are recommending different funds. It might be one thing if experts had a solid basis for their perspective. If they did, then you would think their recommendations would line up and they'd all be touting same thing.

But they don't and they aren't. Oh sure, each one of them can make a good case for their pick. But so can next "expert." And usually both of them won't be right (if either of them is). So, where's value in this for you? Beats me.

Another problem with this approach is that many experts recommend different funds at different times, and, in an effort to be in hot fund, investors keep moving from fund to fund.