[rt2016]

I don't have time to actively trade so I settled to buy shares in an actively managed mutual fund. I did the same research on the portfolio of the fund as I would have done on individual company stocks - looking at past performance, the makeup of the fund, industry performance, and investor websites. I use Investor's Business Daily as a more impartial source, it's just numbers without much "insight".

One good thing is that the mutual fund has automatic diversification within a particular industry and if you buy shares in multiple funds you get diversification across multiple industries. Another good thing is that the shares of mutual funds are often $100-200 each while the shares of individual companies (ex. google) can be $700 just for one. Using a "high-tech sector" mutual fund allows me to benefit from the growth of multiple companies (goole, apple, intel, facebook, microsoft, intel, etc.) while not having to own separate shares of each of them.