mutual fund tax trap.

There are no extensions for IRA contributions, even if you have an extension to file your tax return.

It's a point I'd make regarding any mutual fund, but it's particularly important in a mutual fund type where you expect a low absolute return. If you're paying 1 percent in expenses and you're earning just 3 percent, you're forking over literally a third of your return.

[They] say that they're going to give their child a mutual fund contribution or some kind of gift through a stock investment.

That's because the market's been dominated by entrepreneurial investors, rather than typical mutual fund investors.

This way, if there are any problems, all the retirement money isn't at risk.