Don’t be too casual when picking stock funds. Stock (equity) funds are the primary growth engine of the average investor’s total portfolio. This is where you make the big profits, or take your largest losses. Here are some investor tips geared to those of you not quite yet up to speed on how to invest in stock funds.

Do not put much faith in investor tips that tout specific funds as the “best ” or “hot”. Some of this free advice is self-serving, and most of it misses the mark. There are thousands of equity funds out there, and nobody has a great track record at picking the best.

Do not chase performance. Last year’s big winner is sometimes next year’s big loser. A few lucky bets by a fund manager can later blow up in investors’ faces as market conditions change.

Focus on stock fund types or categories. Do not jump from fund to fund in the same category without good reason. If a fund has a poor track record vs. other similar funds, avoid it. A proven loser doesn’t often change its ways.

If you own a fund that tends to under-perform other funds in its category, dump it. Mutual fund literature will compare a fund’s performance to an index of comparable funds. Look at this literature.

If you are just learning how to invest, but realize that you should invest in stock funds for growth, get started the easy and safest way. Start with a TOTAL MARKET INDEX fund or an S&P 500 INDEX fund. These major index funds track the U.S. stock market in general. You participate in the stock market without the fear of having picked a loser fund.

Check a fund’s expense ratio, they all have one. These expenses come out of your pocket and eat away at your fund’s value. Index funds can have low expense ratios, costing you less than one-half of 1% a year to own and hold. Some stock funds charge more than 2% a year. A high expense ratio is no indication of high quality.

There are numerous types or categories of stock funds. In picking stock funds when you know little about how to invest, look first at LARGE-CAP funds that are general diversified funds called either EQUITY INCOME or GROWTH and INCOME funds. These invest in the likes of IBM, Coca Cola, Wal-Mart, and GE. They pay average dividends with average risk.

SMALL-CAP and GROWTH funds are riskier popular categories of stock funds. Consider smaller positions in these funds if you want further diversification. Your major stock holding(s) should be large-cap diversified funds, with an S&P 500 Index fund being a perfect example.