There are thousands of mutual funds and many are making money for their investors year in and year out. How to pick a fund for yourself? Actually it's not that hard if you follow these basic formulas.

1. Only purchase a fund that has a ten year or longer performance.

2. Only purchase a mutual fund that has an annual expense ratio of one percent or less. The expense ration is what it costs the fund to conduct its business.

3. Buy a fund that is no-load.

4. Never purchase a fund that has a one or two year history of excellent gains. These are called one year wonders and almost never last.

5. Do not buy a government or corporate fund as a long term investment. These funds have had a horrible record and sometimes the dividend rate declines along with their principle values.

6. Stay with the fund for the long term. Just because it loses some value in a given year doesn't mean you have to sell. Long term is the best advice.

7. Always own a fund that feels comfortable to you with its risk tolerance.

8. The categories of mutual funds are Growth, Growth & Income, Income, Balance, and Select Funds that deal with certain sectors of business such as Technology, Energy, Metals, Electronics and many others. Most fund families have sector funds.

9. A very important factor on selecting a mutual fund is to measure the funds performance against other funds in the same category. It's not hard to select a fund for the long term, it only takes a little investigating and the Internet is making it easier and easier. All the information is available to you with the click of the mouse.