In my opinion, mutual funds are one of the best types of investment vehicles and should be a part of virtually every retirement plan. With mutual funds, you get the benefit of professional management; some of Wall Street's best minds handle the difficult job of selecting investments for the fund you've chosen while you're off doing other things.

You also get diversification. Many times 100 stocks or more are included in one fund. The main disadvantage to a mutual fund, of course, is that there's no guaranteed return. Mutual funds can increase or decrease in value due to fluctuations in the market, meaning you could either make or lose money. Unlike a savings account or a CD with a major bank, there is no FDIC insurance to cover your losses. But for an investment to have a chance of out-pacing inflation, it can't be tied to any particular fixed rate of return, like federally insured CDs and savings accounts. CDs and savings accounts play a role in retirement planning, but not as wealth-building vehicles.

It's not my intention to give you all the information you might need regarding mutual fund investing, but I can give you one of several major guidelines for researching mutual funds. This will give you a jumping-off point to do your own research:

Evaluate the track record, management team and categories of stocks within the fund. Look at the fund's previous track record, meaning how the fund has performed over the last one, three and five years. Sometimes a 10-year history is available, but many times that history isn't helpful because so many variables could have changed over the years.

Keep in mind, even though past performance doesn't guarantee future results, it will give you an idea whether the fund manager knows how to maximize returns. Whether he or she can do it again is another story, but at least you know whether the manager has traveled that road in the past. Also, when you check the track record of a particular fund, make sure that the fund manager who was responsible for those returns is still in charge. If not, you would have no way of evaluating the fund's long-term management.