Mutual Funds

Introduction
Mutual funds are a group of securities that investors buy.  They have stocks, bonds, and other assets.  By having mutual funds you will have a more diversified portfolio.  You should always have your eggs in more than one basket.  By having different assets you are less likely to lose investments.

Goals and Risks
When buying a mutual fund, figure out what your goals are.  Are you buying a mutual fund for retirement, college, or simply to supplement your income?  By identifying your goals, you will be better able to pick the mutual fund that is right for you.  Are you willing to win big?  If so, you may loss a lot.  The higher the risk the higher the reward.  You may be conservative.  If so, you have low risk, but the you will make less money.

Types of Funds
If you are investing for retirement and are willing to take risks; you should get common stocks.  If you want to take on less risk get a balanced fund.  They are shaky, but may have great growth after several years.  If you simply want to supplement your income; you should get some income funds.    
Fees
Most mutual funds have sales fee.  There are called front-end load fee and back-end load fee.    Front-end load fee is what you will pay when buying the investment.  A back-end load fee is what you would pay after you sell it.  When you buy a mutual fund you would only pay one or the other.  Some mutual funds don't have any sales fees.  They are called no-load funds.  They have management and administration fees.  

Disadvantage
Your investment is managed by a professional manager.  If they manage your funds correctly you get a big return.  If they manage your funds incorrectly, you will get a small return.  You may have to pay them regardless.

References
http://www.investopedia.com/
http://content.moneyinstructor.com/804/advantages-disadvantages-mutual-funds.html