If you're thinking of investing in a mutual fund for the first time, or adding a new one to your portfolio now, don't write a check until you hear me out.

Mutual funds typically pay shareholders towards the end of the year. Unless your mutual funds are in a 401(k) or IRA, these gains are usually taxable.

Here's the rub: Even new investors get hit with these taxes although you weren't around for those gains. In effect, a new investor receives some of his own money back again, minus Uncle Sam's take!

Before you commit to a new investment, check the fund's website to learn how much the fund plans on paying in capital gains and when. You can really get clobbered with taxes.

Once you've learned when the fund will pay the capital gains, wait until after that date to send in your money.

Better safe than sorry!!

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