Seven mistakes fund investors make most

There's a difference between trying to do the right thing and actually getting it done. The biggest mistakes mutual-fund investors make fall right in the middle, where an investor trips over the fine line that separates good investing tactics from bad ones.

In talking to financial experts and fund specialists, as well as reviewing industry statistics about ownership and asset flows, it's clear that the investing public keeps trying to do the right thing, it just doesn't always get the best results.

Here are the biggest mistakes fund investors make. If they describe the way you have been investing, it might be time to check your portfolio and your mindset:

The 7 fund stats that mislead investors the most

My friend Keith works for a big mutual fund company and assumes I hate mutual funds because, he says, I "always write about the things we do wrong."


He insists that fund companies don't actually do much wrong, because they follow the rules and regulations and they'd get in trouble if they violated those standards.

While he's right from a legal standpoint, Keith ignores the simple truth that the rules leave fund companies a lot of ways to fudge the statistics, and the meaning of the numbers. What's more, industry practices let fund companies and research firms hype red herrings, information that's attractive but not necessarily meaty and important.

In our recent discussion, I laid out for Keith what I considered the most misleading statistics and data in the fund world. The longer the conversation ran on, the more I realized that most fund investors don't necessarily know how this information can be used against them.
If these points factor into your investment decisions, you may want to look more closely at their meaning: