If you get jittery and trade too often, these rock-bottom commissions will add up, possibly eclipsing what you'd pay in a fund. If you want professional advice, you will need a full-service broker who'll charge much higher commissions. Remember, you get what you pay for. A big chunk of those fund fees pay the salary of a professional fund manager who'll analyze the corporate financial statements for you. There is one important caveat here, and that is first-hand or special knowledge of a company or industry.
Hoteliers know the best hotels and Internet junkies know the best online companies.
Buying shares of firms that you have an intimate knowledge of, may give you one up on the pros. Studies have found that asset allocation has a larger impact on overall long-term returns than stock selection or market timing. Stocks One problem with funds is once they become successful, they have too much money to invest and end up owning too many stocks. As they keep growing they begin to mirror the return of the index they are trying to beat. One solution is to pick a few stocks that look like winners.