Mutual Funds...

I'll admit I'm not the biggest fan of mutual funds. With that out of the way...

Mutual funds can be just as risky as stocks actually. It really all depends on the fund you're looking at. First of all, a number of funds concentrate exclusively on a particular sector, so even if you've got stock from a bunch of different companies, it doesn't mean you're much safer than someone who bought stocks. It might, however, protect you from incompetent management at a particular company, but it also means good management at another will be less profitable. But in the case of an event affecting the sector your fund concentrates on, you'll feel it. But I doubt the kind of funds you're looking at fall in this category so you probably don't have to worry. Still, you should look at what makes up the fund.

Second, watch out for fees. Mutual funds are managed funds, meaning someone who is (sometime supposedly) knowledgeable makes constant adjustments to the fund's composition by buying and selling stocks. That's all fine, but that means he has to be paid. And the money to pay him comes from your investments. And some mutual funds charge obscenely large fees when compared to their return. It might not seem much, but as in anything related to investment, compound interest is the key, and it also works against you. What you thought was just a small fee might end up costing you a few, or many, thousands of dollars once you decide to retrieve your money. And of course there's also a bunch of other fees that are sometime hidden, for example, fees when you invest money in the fund, or when you decide to remove your money from the fund. Make sure you spot them all before you invest.

Third, take a look at the fund's past returns. And by that I mean the returns for MANY years. Even if the fund had a 150% return the previous year, it means absolutely nothing. A number of fund will have negative returns for a number of years, then suddently a high positive return, then negative returns again. In the end, you'll lose quite a bit of money.

I'm not saying all mutual funds are bad, but a number of them certainly are. You just have to choose wisely, and to do that, you need to do a bit of research on your own. Same thing if you ever want to buy actual stocks someday, which isn't that hard, nor that dangerous if you know what you're doing.

Something you might want to look into are index funds. Essentially, they're funds that mimic a particular market index. For example, the Vanguard S&P500 index fund mimics the S&P500, essentially an average for the performance of large corporations. The main advantages are that they tend to have very low fees and you're pretty much garanteed to get the market's average returns. Don't take my word for it though, as I said you should look around and compare.

Jam it back in, in the dark.

If you're thinking of buying a book, I can't help but make the following suggestion: take a look at "The Intelligent Investor" by Benjamin Graham. It's more than 50 years old, though there are newer editions, obviously, but still quite nice. Though if you're looking for some sort of "Get rich quick without thinking" kind of book, that doesn't work, then look somewhere else.

There's nowhere I can't reach.