Hey, compared with selling the suckers, buying mutual funds is easy. At least as a shopper, your to-do list is manageable: Do your homework. Gauge your time horizon and your tolerance for risk. Break down expenses and fund managers' long-term track records.... OK, maybe it's not so easy.

Finding Mr. Right
But even if results do vary, funds are just about perfect for serious long-term savers, especially if you commit to a disciplined program of dollar-cost averaging. After all, setting aside a set amount on a regular basis not only keeps you honest, it helps ensure that over the long haul you'll buy more shares when prices are low and fewer when they're high. When equities or bonds really hit the skids, you're able to snap up shares of your favorite funds on the cheap.

As I wrote last week, that's an unbeatable game plan provided you've picked the right funds to begin with. But what if it turns out -- horror of horrors -- that you goofed? Or what if you did pick right but then something fundamental about your fund changed? Don't panic, but do read on. I've done some serious work recently on just this topic for my Motley Fool Champion Funds subscribers, but here's a quick and dirty rundown.

Who's this guy?
Whenever there's a changing of the guard atop your fund, it's time to consider selling. A fund is only as strong as the manager picking the stocks, and if that person hits the road, you may very well want to follow her out the door. There's nothing inherently magical about a fund, after all, and that's why it's critical not to make past performance the linchpin of your selection process. That past performance may very well belong to another team. Consequently, you should focus on the current fund manager's record.

Indeed, if the new guy coming aboard your fund has shown elsewhere that he has what it takes to get the job done, plan to sit tight. One of the great things about fund investing is that you're rarely, if ever, forced to make hasty decisions that you might regret later. On the other hand, if this new kid on the block has stunk up the joint at each of his previous charges or -- almost as bad -- has no public record to speak of, you'll want to move on. Any decision to sell a fund has to be weighed in light of the potential tax bite, of course. But at the very least, you can choose to direct new money toward a pick with a proven stock picker at the helm.

What's he thinking?
If your fund moves away from the investing philosophy that originally drew you to it, that's another reason to think about selling. Consider the case of Fidelity Magellan. Under the direction of stock-picking luminary Peter Lynch, Magellan was a stone-cold champ back in the day, a bold and intelligently managed fund that made gobs of money for shareholders by dint of Lynch's relentless pursuit of that rarest of stock market species: the 10-bagger. Bob Stansky runs the fund now, and though he's certainly capable, the poor guy has to contend with a massive asset base that has ballooned beyond some countries' GDPs.

Not surprisingly, while Lynch made a career of scoping out upstarts like Limited Brands (NYSE:LTD) and Gap (NYSE:GPS) in their early days, the fund has morphed almost into an index tracker. Seriously, Magellan looks like the VIP room at Club S&P. The fund's top holdings include Citigroup (NYSE:C), Microsoft (NASDAQ:MSFT), and Pfizer (NYSE:PFE), alongside tried-and-true blue chips like ExxonMobil (NYSE:XOM), Home Depot (NYSE:HD), and Wal-Mart (NYSE:WMT).

I've got nothing against the S&P, of course. It's a time-tested bogey that's proved tough as nails to beat (though it can be done!). I just don't think investors should pay a premium to invest in a fund that tracks the S&P as closely as this one does. Why pay 0.70% of your assets each year for Magellan, after all, when Vanguard 500 Index (FUND:VFINX) can be yours for just 0.18% each year?

Performance anxiety?
I've saved this one for last because it's usually the worst reason to sell a fund. All too often, investors go scurrying after this year's chart-topper when the pick they hold may well be poised for a rebound. That's called "performance chasing." It's tantamount to a momentum play with stocks, and it's subject to similarly dreary results.

That said, there are performance-related reasons to sell mutual funds. If your fund has been lagging behind the pack for a meaningful length of time (three years, say), that's a reason to give it a close look. And if on looking you find that the fund is also bringing up the rear among others that share its investing philosophy and market-cap focus, that's an important clue.

No manager can control broader-market cycles, of course. When small-cap stocks are beating up on the big boys, you naturally find that same dynamic at play in the universe of mutual funds. But if your pick comes up a protracted loser relative to others that are playing on the same field, your manager's stock-picking prowess may be on the fritz. It's also another good reason to consider selling.

Now what?
So there you have it -- three compelling reasons to think about selling a mutual fund. Believe me, as one who has struggled with sell decisions in the past, I know just how tough it can be to shake a loser loose, particularly if it's a fund that's served you well in the past. Sometimes, though, it just has to be done. These simple guidelines should help you make the right move when that time comes.

To read Shannon's special report on when to sell a mutual fund, take a free trial of his Motley Fool Champion Funds. He even names names -- a trio of (way too) widely held funds you may hold yourself and that no Foolish investor wants to be caught owning. Take a risk-free trial by clicking here.

Shannon Zimmerman sells seashells down by the seashore. He doesn't own any of the stocks or funds mentioned above, and The Motley Fool has a disclosure policy.