Fund managers are ever on lookout for ways to spin stats to hide lousy track records and to find ways to obscure fees. To add insult to (financial) injury, investors end up being penalized for selling. So what's an investor to do? In this case, knowledge is power. Here are some of ways mutual fund investors are being taken advantage of:

·Performance is always an issue for any investor. Formerly great funds, which I've used myself during 90s, are junkyard dogs of this century. Janus Fund comes to mind and is one of many that buy-and-hold investors got stuck with. It's down 59%, since we acted on our Sell signal on 10/13/2000.

·Most of funds today have 12b-1 fees place, and some go as high as 1% of a fund's assets per year. Between fees, commissions and management charges, mutual fund industry is always getting paid, even if you, investor, are losing money. For example, if you had bought SunAmerica 2-1/2 years ago, you would have paid above fees at 2.35% per year. And, if you finally decided your investment wasn't going anywhere, you would have been stuck with a 5% deferred sales charge.

·If you hold a fund less than 180 days, plan on being hit with a redemption fee. It's almost standard. What's deal? Brokers only get paid while you hold their fund. So, if you're going to sell, they get a last whack. It's a great deterrent for selling, too. Can this be avoided? Not completely, but if you have your money managed by an investment advisor, holding period is reduced to 90 days.

·Then there's deceptive no-load rip-off involving B-shares. Sure investors don't pay anything up front for these, but you'll pay hefty surrender fees when you sell. Plus, they carry higher management fees.