A mutual fund (called 'unit trust' in Asia) is an investment vehicle that pools money from many individual investors. A professional fund manager invests and manages these funds into stocks, bonds and other securities.

People usually invest in mutual funds because it is offers the advantage of broad diversification (it spreads your money over tens or hundreds of stocks to reduce risk) and professional management.

Believe that a part of the economy will be particularly strong or a part of the stock market is undervalued?

Sector mutual funds are one way of investing in market niches. Sector funds enable you to pinpoint your investments in areas such as health care, biotech, and technology (or financials, after the Fed rate cut).

ETFs are another, but have some additional risks.

Which of your investments worried you most during the recent market correction? If it was one of your smaller holdings, you're not alone.

We all have only so much time and so many brain cells to devote to investing. If you're focusing yours on a tiny portion of your investments, the majority of your net worth is going unwatched.

Many investors I speak with are focused on only one or two of their investments or, worse, are fixated on the one they sold which has since gone up in price.

One of the mantras of mutual fund investing is to look at a fund's turnover before you buy it. The implication is that a high turnover is bad. (Turnover is the percentage of a funds holdings that are traded during a year. Funds can have a turnover greater than 100%, which means that their average holding period per investment is less than one year.

You may have wondered if there are people out there who consistently make money from the stock market. These people are no smarter than you. They do not work any harder and neither are they lucky than you. But, unlike you, they never seem to worry about having money because they know one or two secrets of making money in the stock market. The idea is to make pennies consistently and to use them to build vast personal fortunes. The stock market is a proven wealth builder and can and should benefit all participants. It is only fair that each one of us should be entitled to a piece of the action.

There was an excellent article discussing the pros and cons of investing in Exchange Traded Funds (ETFs) in the July 3rd Wall Street Journal: As ETFs Seek Niches, Risks Rise (unfortunately, The Wall Street Journal doesn't allow us to link to their articles, perhaps that will change after Rupert Murdoch buys Dow Jones.) There's over $500 billion invested in Exchange Traded Funds and, I believe, they will either replace open-end index mutual funds or force those funds to lower their expenses.

The S&P 500 is up about 7.5% thus far this year. That's a good return for just over six months. Will it keep going up? Consider this. The earnings of the S&P 500 companies are expected to grow by about 5% in 2007, according to a leading Wall Street brokerage firm. That means if the market was fairly valued at the beginning of 2007 and there were no big changes as to how investors think about the market, the S&P should only go up by 5% in 2007.

When you have been awarded a settlement due to arbitration or through the order of a judge as a result of a lawsuit, one of the options open for receiving the award is by accepting structured mutual funds. But is this really a smart way to go? The fact is that it can be an ideal way of getting the most from the settlement. Here are a couple of reasons why.

Far too many people put off savings for their retirement until they are in their 30s or 40s. The best time to start saving is with your very first paycheck! For many, putting off saving for retirement has little to do with having enough money to put away.

What exactly is inflation and why does it eat away at retirement savings so much? Inflation is simply the tendency of prices to increase over time. A moderate inflation rate usually does not bother the average working consumer much since even small annual pay raises help to offset it effects.