So, now you’re aware of the pros and cons of investing in mutual funds. There are many upsides, and some negatives that you have to mull over depending on your own investment goals. But as with all investment opportunities, one important question is probably eating at you right now: How do you make money in mutual funds?

Obviously, selling off shares of your mutual fund at a higher Net Asset Value (NAV) per share than that at which you purchased the fund will net you a profit. The fund acts as a single unit, and the total return is based on all the stocks, bonds, and other securities held. Therefore, if certain stocks do very well within the portfolio while others don’t, you cannot simply sell off the lucrative investments or get rid of the losers. You have no say in the individual investments, but you can sell off your shares of the fund as a whole. There can be profits made, however, in the form of capital gains when the fund manager sells off a security. While funds are constantly reinvesting money, you can actually see money from the fund as you hold onto it. Income funds will dispense income from dividends paid by stocks within the portfolio or interest paid by bonds in a bond or balanced fund. If you are seeking a steady flow of income from a mutual fund, this may be the route to go.

Despite operating costs and commissions, there have been some solid results from mutual funds in recent years. How long the trend will continue depends on a number of factors led by the economy, the stock market, and the number of effective fund managers, among other things.

Historically, mutual funds, especially stock mutual funds, make make money on an average annual basis. The best thing to do is to keep investing; keep your money away from the local mall or bingo parlor and into the stock market. That's the key to wealth creation.