Learn how funds work and how to use them to set up a well balanced portfolio that's right for you. Thinkstock By the editors of Kiplinger's Personal Finance Updated January 2015 Funds offer plenty of benefits to busy investors. Here's everything you need to know to make them work for you.See Also: Our Favorite No-Load Mutual Funds Why Mutual Funds? For investors without much experience or time to devote to building a portfolio, mutual funds offer advantages that simply aren't available anywhere else. Sales Loads and Other Charges Learn about the expenses funds charge and which ones you can avoid. Focus on Categories A fund's performance depends on what it buys. Each category carries its own level of risk ... and reward. Build a Solid Portfolio A balanced collection of funds will serve you better than a collection of the latest high fliers. Diversify Your Portfolio You'll get stability and the probability that at least one of your funds will be up no matter what the market's doing. Start Your Search From first choice to final check, here's how to find the best funds for you. Tips for the New Fund Owner What paperwork to keep, how to track your investments and when to say "sell." Hang onto Your Profits Keeping careful records, and understanding cost-basis rules will prevent you from overpaying your taxes. Time to Ditch Your Fund? Learn to tell the difference between a fund that's hit a speedbump and one that's dropped out of the race completely.