For years investors have been taught to lookinto the composition of a mutual funds. In otherwords the "experts" want you to take the time toanalyze the stocks within the mutual fundportfolio, categorize them by industry group andtry to understand the objective of the fundmanager. This is nonsense.

When I go the track I look to see what the horsehas been doing for the last several races. Idon't give a hoot what he had for breakfast. AllI want to know is has he been fast? Is there agood chance he will finish in the money in thenext race? I only want to know how he has beenperforming.

Most mutual fund managers, except those whofollow index funds, are always trading. You haveno idea that what is in the portfolio today wasthere yesterday or will be tomorrow. Some fundmanagers trade more than others, but you canprove this to yourself by looking at the fundprospectus at the beginning of the year and oneof the updates that funds publish quarterly.Many of the stocks will still be there, however,you don't know if the percentage holdings arethe same.

By the way, don't bother reading a mutual fundprospectus. They are worthless when it comes tomaking money. Consider that most of theinformation in it is about a year old by thetime you read it. Think about this seriously fora minute. Is there anything you can find out inthe document that will show up in your bottomline? I'll wait while you think. OK? Therereally wasn't anything was there? Allprospectuses are basically worthless.

But you say the SEC (Securities and ExchangeCommission) in Washington approved this. No,they did NOT. They don't approve of anything;they just read it to be sure it meets theregulatory requirements for disclosure. There isalmost no difference between the prospectus forthe worst mutual fund and the best mutual fundand both of them may have been read by the sameDilbert in his cubicle at the SEC.

There is one excellent way to find out whichfund to buy. It is based on performance. Howmuch has the fund increased in price during thepast 12 months? Just 12 months. Many financialanalysts want you to look at 3-year, 5-year and10-year performance. Remember that horse? Idon't care how many races he won 3 or 5 yearsago. Can he run NOW? There are many publicationsand web sites that tell you the best performers.Investor's Business Daily prints a list of bestperforming funds each day. You might have to seethe paper every day as they sometimes just tellabout the long-term performance. You want thelast 12 months and the last 3 months.

Three years ago you could have bought the bestperforming fund on the street and today have adog. I call a dog any mutual fund that is notoutperforming the S&P500 index.

If you were a jockey you would want to ride thefastest horses because in many races you get apercentage of the purse. The same applies tomutual funds. You must own only the bestperforming funds at all times. Like the jockeyyou must pick the fastest horse if you want tobe a winner.

You should review your fund holdings monthly tosee that you are only in the best funds. Itmight take you an hour, but you will find thatyou will double the current return on yourmutual fund investments. Do it!

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make moneyand keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street doesnot want you to know.

RELATED ARTICLES VIX No, this is not a symbol for some Latin number. The Wall Street mavens talk about this market timing device as if they knew how to use it to determine which way the stock market is going - up or down. Tips to Finding Other People's Simple Trading Plans Did you know you can make money (and a lot of it) by simply modeling someone else's trading plan? Yes, it is true. Unbelievably, there are many of trading gurus doing it RIGHT NOW. The Secret Art of Backtesting If you have not back tested your trading system, you might as well trade with your eyes close. In fact, whatever technical analysis criterion you use to trade with, be it moving averages, candle sticks, volatility breakouts, fibonacci retracements or any other trading system you have devised you're going to need to back test your trading system thoroughly and objectively in order to remove any possible doubt about it's capability. Investment Lawyers and Trash Stocks The trash business in its efforts to cook their books trying to keep pace may find itself in some trouble. The efficiency per Garbage Truck unit numbers was growing exponentially at a time when consolidation has slowed as there is a decreasing number of worthy deals to make for a good value, Ah ha Warren Buffet's favorite remarks are here too. On Line Stock Trading: Small Cap & Micro Stocks Go Up and Down - How Can You Profit? Success in small cap & micro cap stock trading like with any other business in life comes from being able to see the big picture and from paying attention to the small details.Let's say for example that you are a business owner and you have a jewelry store on a given street just like the guy in the other corner does, but still the other guy is making 5 times more profits than you are only because he's doing something different. Adding Funds Someday you may want to retire and continue to live in the life style to which you have become accustomed. According to conventional wisdom you will need less money because you will have fewer expenses than when you had to go to the office every day. You Don't HAVE To Be Trading As a novice trader, you'll often feel the need to trade.You may be bored or frustrated. Long Term Financial Vehicles Investing in long-term financial vehicles give you the most gains but it also puts your funds at greater risk. There is much truth to the saying, "there is no gain if there is no risk". Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading? Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I've noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals. What is the Most Important Indicator of All? Most stock market traders have a favorite technical indicator.The one that they have the most confidence in. Dispelling Illusions of the Stock Market How can you dispel an illusion unless you look directly at it? The magician distracts the eye with one hand while he does his manipulation with the other. You are looking in the wrong place and not seeing what is actually happening. Historical Briefing: Stocks, Finance and Money The World Bank claims that some two billion of the world'scitizens live on $1 per day or less! That fact absolutelyshocked me. With this statistic in mind it becomes important tofocus on all of the things that have served as money over thehistory of civilization. Understanding a Stocks PEG Ratio A PEG ratio cannot be used alone but is a very powerful tool when integrated with the basics (price, volume and chart reading). You must enjoy crunching numbers and have a calculator handy to estimate your own PEG ratio. 3 Components Needed for Beating the Market Time to look back2004 is over, now we are in 2005. This is time to seriously look at performance of your personal investment, such as mutual fund, or individual stocks holdings, etc. Pathways During our travel down life's path we come to many places where the trail divides and we must make a decision. Some involve psychological (emotional) choices - marriage, divorce, leaving home, career changes, etc. 8 Penny Stocks to Avoid There are many good penny stock investments available, which could turn a small amount of capital into a small fortune very quickly. However, to discover these you need to know what to look for and what to avoid. Leverage - Margin Debt What is leverage?Here is a definition of leverage from an online dictionary "leverage - The use of credit or borrowed funds to improve one's speculative capacity and increase the rate of return from an investment, as in buying securities on margin."Essentially, the core idea of leverage is that investors can use less money to control bigger amount of investment so that investors can make more money when the price movement is in investors' favor. Risk Control Everything you invest in has risk so you want to do your research before you put your money on the line.For example, when McDonald's opens a new restaurant (please, don't call it a hamburger joint) they will investigate as many of the relevant facts as possible. Choosing A Fund For years I have been saying you must have a fund that is outperforming the S&P500 Index. Well, I've changed my mind. Investment Research - The Dalbar Study Very few people, even professionals, have heard of the Dalbar Study that originated in 1995. Its purpose is to determine the profitability of trading for the small investor of mutual funds.