Mutual fund investing can be much easier than investing in individual stocks, especially for beginners. For starters, you'll get the services of a topnotch mutual fund manager at just a small fraction of the cost of a personal investment advisor. This person is usually an expert in the field or sector you are investing in, which means you don't have to be.

Then there is the “getting in” factor. In short, investing in mutual funds is cheap — quite often you can invest in a fund for as little as $25 or $50. Add to the mix flexibility, choice, ease of management, and generally positive performance from stock mutual funds over the years, and you begin to see why these are so popular.

In an age where there are numerous types of Coca-Cola — Classic, Diet, Cherry, Caffeine-Free, Caffeine-Free Diet, Zero, and so on — it should not be surprising that there is also a wealth of mutual fund categories. As the market continues to grow, more and more types of funds are created, which adds further confusion. This chapter will help you clear this up.

When choosing a stock fund, you first want to know its overall goal. For example, does it aim for conservative long-term growth or aggressive short-term growth? Before purchasing a fund, you should ask to look at a listing of the stocks currently owned so you can see if the fund managers are indeed following the plan of action they have listed as their goal. Whether you're interested in index investing, current income, capital growth, good value, or superstar sectors, you can find it in the world of stock mutual funds.