• Invest your money wisely.stock market crash image by Paul Heasman from Fotolia.com
  
  Investing in mutual funds can be an excellent way to secure your financial future, but only if you choose the right funds and invest your money properly. Keeping your costs down and making sure the funds you choose are appropriate will go a long way toward helping you build a nest egg you can rely on for retirement, education and other major goals.
  
  

Choose a Low Cost Fund

• Keeping fees and expenses down is one of the most critical parts of investing in mutual funds. Those fees and expenses can really eat into your return over time, so keeping costs under control is one of the best ways to boost your performance in the long term. Low cost stock index funds have expense ratios as low as 0.20 percent, so you can use that number as a benchmark when you shop for funds. Index funds simply purchase all of the stocks in a given index. That helps to keep costs down, since there are no money managers to pay and no high expenses to fund.
  
  

Don't Chase Past Performance

• One of the biggest mistakes investors make is jumping into the mutual fund that did the best last year. Chasing past performance is generally a losing proposition, since few funds are able to consistenly do better than the market as a whole. When investing in mutual funds, keep in mind that you cannot buy past performance. All you can do is investigate the funds available to you and choose the one you feel will provide the best performance going forward.
  
  

Invest Consistently

• One of the best ways to build a substantial nest egg with mutual funds is to use a dollar cost averaging approach. With dollar cost averaging, you simply invset the same amount of money month in and month out, regardless of what the stock market is doing. This approach means you automatically buy more shares when the stock market is down, and fewer when it is at all time highs. This helps to smooth out the ups and downs of the stock market, allowing you to accumulate more shares, and more money, over time.
  
  The best way to put this strategy into action is to set up an automatic monthly transfer from your checking or savings account to the mutual fund of your choice. Investing the money automatically forces you to save, while reducing the risk that you will miss a monthly investment.