A Book That Should Help Investors Be Smarter


By Eric Tyson

IDG Books, 400 pp., $16.99

IN his readable, comprehensive book, ''Mutual Funds for Dummies,'' Eric Tyson, a personal-finance consultant, aims to empower the everyday investor by simplifying what he calls ''one of the best investment vehicles ever created.''

Mutual funds -- companies that pool the money of many people and invest it in stocks, bonds, money markets, and other securities -- have won Tyson's praise because they offer investors with as little as $50 access to professional money managers, reduced risk from portfolio diversification, and low management costs.

Today, more than 7,000 funds hold more than $2 trillion in investments, writes Tyson, whose encyclopedic book is chock-full of useful examples and advice for both new and experienced investors on how to ''pick great funds and avoid losers'' and how to understand applications and taxes.

Warnings also abound, as Tyson cautions potential buyers never to proceed without knowing what the sales fees (load) and operating expenses of a given fund are, not to base investment choices on a fund's past performance, and not to trust newsletter ''gurus'' who claim to know the future of the financial markets.

Tyson, whose other books in the ''for dummies'' series include a bestseller on personal finance, recommends investing in no-load funds and emphasizes that such investment should generally not precede paying off debts, bolstering savings, and considering overall financial goals.

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