In my no-load mutual fund practice I use specific recommendations, even for my free newsletter subscribers. They are first based on my trend tracking indicator giving us green light and secondarily on selection of mutual funds based on momentum analysis.

The more specific recommendations, better, because that allows you to follow along either just on paper (which you should do at first) or with your actual portfolio.

5. Are they recommending when to sell a mutual fund either because of gains or to limit your losses? This to me is most important issue. If there is no plan in place for getting out, how will you ever know when to sell? This has been greatest downfall of most publishers (and investors!) since bear market of 2000 — not selling even if market conditions dictate it would be in your best interest to do so.

The advice of most newsletter services can make you money in bull markets. However, with continuation of bear market still a distinct possibility; be sure to look at any newsletter's investment advice record since 2000.

For many people investing is an emotional issue. The pendulum swings between fear of loss and greed for greater returns. If a complete methodology for buying and selling is offered in a newsletter, such as one I advocate, be sure that it fits your emotional make up.

There is no sense in following an investment approach, which may have merits, if it means sleepless nights for you. You won’t stick with it for long term — and long-term investing is essential for making your portfolio grow and prosper.

So, bottom line is to look for a newsletter that: • does not promise moon, • has a track record through up and down markets, and • recommends an approach that not only is compatible for your investment style but also has an exit strategy so you can capitalize on your gains -- in bank, not only on paper.

Following these guidelines may not make you rich, but it will help you avoid some bad advice.

For sake of argument, let's assume that you won't be paying any PMI. Now, let's compare two neighbors, with identical houses, who have same monthly payments on thirty year mortgages. The first neighbor has a $100,000 mortgage at 10% interest, second has a $146,000 mortgage at 6%. You may think this is extreme, but I can tell you that this is what has happened in my neighborhood over last 5-7 years. The type of house I'm living in retailed for under $100,000 in 1999, and retails now in $130,000's.

Back to our example. Both of our neighbors are paying about $875 per month on their mortgage. Now let’s suppose that both of them decide to pay extra on their mortgages, upping their payments to $1,100 per month. Both neighbors are reducing their principal balances by $225 more per month, and here’s where first neighbor has advantage. The balance on $100,000 mortgage goes down much quicker than $146,000 mortgage, such that while first neighbor is paying more in interest every month than second neighbor, by sometime in seventh year, neighbor one is actually paying less in total interest. Neighbor one will pay his house off in a little over 14 years, while neighbor two will take about 18 years to pay off.

In this example, we don’t even take into account possibility that neighbor one could refinance balance on his mortgage when interest rates decline. This would lower his required payment, and allow him to pay off his house even faster. In meantime, “market value” of his house has risen to about what neighbor two paid ($146,000). When neighbor one decides to sell his house, he’ll walk away with a lot more cash.

Obviously, this is a simplified example, but one that has been occurring over and over again in last few years. I know that it’s expensive right now to buy a house, no matter where you go. What do you do in this situation? I recommend looking for, and buying, a home that needs some work. You should look for houses that are selling at about 80% of average market value in a neighborhood. These houses will generally need only cosmetic work, and maybe a few minor repairs, but you’ll save on price of house and have extra equity right off bat. Stay away from houses that need plumbing or electrical work, unless you know someone that will fix it for free. Those fixes cost big bucks, and will eat up much of savings on price of house.

Buy house, make cosmetic changes, then have it re-appraised. You’ll be surprised at how much “value” of house has gone up. (I put value in quotes because only real way to judge value of a house is to sell it. An appraisal is simply an estimate of value.) This will also help you get rid of PMI, if you didn’t have 20% downpayment, because once balance of your mortgage falls below 80% of your appraised value, you can petition to get rid of PMI. Houses can be investments, and like any investment it takes a work to find good value. But it can be done.

Chris Mallon is the editor and publisher of the Undervalued Weekly, a free personal finance and investment newsletter, published every Saturday.