No Control . Unlike picking your own individual stocks, buying a mutual fund puts you in the passenger seat of somebody else's car. The downside of diversification. The Mergon Stanlynch 2000 Best Ideas Fund holds so many different stocks that insanely great performance by a fund's top holdings still won't make much of a difference in the fund's total performance. Buried and Confusing Costs.
Mutual funds specialize in burying their costs.
Fund Classifications Mutual funds come in every possible size, shape, and color. Here are some of the general categories of mutual funds. Bond Funds Bond mutual funds are pooled amounts of money invested in bonds. Bonds are IOUs, or debt, issued by companies or governments. A purchaser of a bond is lending money to the issuer, and will usually collect some regular interest payments until the money is returned.