Most mutual funds are a part of what's called a family of funds. A mutual fund family is simply a group of separate mutual funds marketed by the same overall management company.

You'll want to simplify managing your investments and moving money between funds (when the economy dictates) by looking for fund families that offer funds in the Stock, Bond, Precious Metals, and Money Market categories. That way it'll be simpler to move your money from one kind of fund to another when necessary, without a lot of fees, and with a single phone call. When you move money from one fund to another, within the same family of funds, the movement will be less complicated and cheaper.

Another advantage of investing in mutual funds, versus trying to do your own individual-security investing, is what we could call economies of scale. Since the fund manager is running a big company, he or she saves money on all the clerical, analytical, and other specialty help needed to be successful. And having all these economists, consultants, and other specialists on staff gives the fund manager access to more powerful and timely information than the non-professional investor would likely have available to them.

Yet another advantage of mutual fund investing is that the fund does all the paperwork for you. You'll get regular statements, either monthly or quarterly, showing your investments and redemptions (buying and selling shares) and any income you've received during that time. You'll be able to compare these summaries with the individual confirmations you received each time you made a transaction.

At tax time you'll be issued a Form 1099, which shows your taxable growth, from income and capital gains, over the previous calendar year. Be aware that a copy of each Form 1099 is also sent to the IRS, so don't think you can "forget" to include any gains from your investments on your tax return.