Detailed Answer: A mutual fund is a fund operated by an investment company that pools your money with hundreds of other investors to buy stocks, bonds, options, commodities, or money market securities. These funds offer investors the advantages of diversification and professional management.

Detailed Answer: A load is just one of the factors to consider when purchasing shares of a mutual fund. Don't pass up a great fund that has a load to get in a bad fund without one. The managed loaded fund may far surpass the investment returns of a no-load fund. Also, all costs must be weighed to compare loaded funds versus no-load funds. No-load funds can actually be more expensive in some situations.

Detailed Answer: Some financial planners do sell no load funds; others do not. Dave Ramsey does not dwell on whether a fund has a load or no load as much as he pays attention to how well the fund has done over long periods of time. There are lots of good mutual funds. Dave says to put your money in them and just leave it alone.

But keep in mind one of the main weaknesses of a no load mutual fund is that you usually have the ability to make major changes (transferring funds, withdrawals, etc.) without having to talk to your financial planner first. The result is that many investors jump out of good funds during bad times. This turns into buying high and selling low, a bad plan. A good financial planner will slow you down, remind you of your long term goals, and give you the confidence to weather bad markets.

Detailed Answer: Dave considers investing to be a minimum of 5 years. Less than that is simply saving and should not be done with mutual funds.

Detailed Answer: The performance of the stock market as a whole has averaged near 12 percent annually; yet the average return of the single stock investor is closer to 7 percent annually. Also, if you place much of your nest egg with one or two single stocks, your risk skyrockets.

Detailed Answer: When you invest money in an annuity with a life insurance company, your investment grows tax deferred. Annuities do require a little more education than some other investments, and done without understanding the rules or at the wrong time, annuities can be a train wreck. If done after other pre-tax investments and with money that is going to be left alone for plenty of time, it can be an option for getting tax deferred growth. Dave doesn't personally own any annuities himself.

Detailed Answer: Absolutely false! Just because an investment looks and sounds sophisticated doesn't mean you are going to profit from it. Never put money in anything you don't understand.

Detailed Answer: Diversification is an investment strategy that involves buying a variety of different investments that are not highly associated with each other, in order to reduce risk. Dave suggests the following diversification: 25% in a growth fund, 25% in an aggressive growth fund, 25% in a growth & income fund, 25% in an international fund

Detailed Answer: A mutual fund's track record is the most important criterion you can use to help you decide whether to invest your money in it. Don't buy baby funds. If the fund is only three years old, it still needs diapers. Dave suggests at least a 5 year track record. Preferably, you want a fund that is old enough to have seen hard times. If the fund has at least a 10 to 15 percent average return over ten to fifteen year, you have a good fund.

Detailed Answer: Don't make investment decisions by yourself. Dave always recommends getting advice from a financial pro. The financial advisor you choose should have the heart of a teacher and explain investing to you in a way you can understand. Would you like to know what professional financial advisor Dave recommends in your area? Then click here now!