Diversify Your Mutual Funds

Invest in multiple mutual funds to diversify your portfolio. After you've invested in a standard index fund, look into industries and markets that interest you. Compare mutual funds that concentrate on different aspects of the market. By using mutual funds to invest in different market segments, you'll be able to take advantage of larger trends without exposing yourself to as much risk. Just make sure that none of the holdings in your mutual funds overlap as that defeats the purpose of diversification.