SAN FRANCISCO (MarketWatch) -- To paraphrase Woody Allen, your relationship with a mutual fund is like a shark: It has to keep moving forward or it dies. Sometimes with fund investments, what you have on your hands is a dead shark.

Changes in the relationship can be subtle or transparent, quick or evolutionary, but the bottom line is that the fund you bought with all good intentions may now be a sell candidate.

How can you tell? It's more than a gut feeling. Take a lesson from big pension funds and other institutional investors. These professionals use specific guidelines to determine whether a fund fits their goals. In the investment-management business this is known as the "3-P's:" philosophy (beliefs), process (strategy) and people (management).

The pros also review their decisions constantly. Do as they do and consider selling if your fund:

1. No longer fits your objectives or risk tolerance

Staying invested long-term doesn't mean that one size fits all. The aggressive small-company stock fund that helped cover your kids' college bills may be too volatile to hold in retirement. Maybe you just got hired at a big technology company and one of your core stock funds has a sizeable tech stake -- including shares of your new employer. Or you've been investing in stock funds for years to buy a house; now you're close to a down payment and are concerned about risk.

A fund may still be a great fund, but you have to ask yourself, "Is it still great for me?" Mark Salzinger, editor of The No-Load Fund Investor newsletter, says that in retirement "you're going to be living off the assets and need to invest more conservatively." Funds that focus on your career industry tie your portfolio and your paycheck too closely, he adds, so divest those holdings. If buying that house is a couple of years away, he says, move out of stocks and into a safe money-market account. Says Salzinger: "You have to keep the goal in mind."

2. Changes managers

"Buy the manager, not the fund," the old saying goes. That's especially true of funds with solo skippers, but even in large fund companies where a team of associates lend support the lead manager is the brains behind the operation.

"The person making the decisions is the one you should be following," says Kevin Ellman, a financial adviser in Ridgewood, N.J. When a favorite manager leaves, Ellman suggests questioning the fund company about the fund's strategy under new management. "Tell me something to make me believe performance will continue," Ellman says.

Still, if you liked a manager enough to jump ship when he or she does, you might as well tag along. For example, loyalists to noted manager David Winters haven't regretted pursuing him to Wintergreen Fund (WGRNX) after he left the Mutual Series funds.

3. Shifts investment style or strategy

Funds ideally play specific roles in your portfolio. Large-cap growth-stock funds behave unlike midcap-value funds. Emerging-markets offerings don't track U.S. small-cap funds. These differences diversify risk and can enhance returns since all your investments aren't moving in lockstep.

Now suppose a small-cap manager chases hot midcap stocks or a manager who once focused on steady, dividend-paying companies embraces growth stocks. If you no longer recognize the fund you'd bought, take a closer look, says Christine Benz, director of personal finance at investment researcher Morningstar Inc.

"Be on high alert for strategy slippage," she says. Find answers in the fund's shareholder updates or call the fund company. Benz adds, "A big change in strategy should cause you to revisit whether the fund still occupies the role you want it to have."

4. Lags its peer group

No fund does well all the time, but how much rope should you give a poor performer -- especially if its manager and strategy haven't changed?

"If I fire managers simply because they underperform one quarter, I'm likely dismissing those with good long-term potential," says John Nersesian, managing director of wealth management services at Nuveen Investments Inc.

For Ross Levin, a financial adviser in Edina, Minn., dumping a fund depends on its investing style. Growth funds that aren't among the top 25% of their peers over a three-year period get booted. Bargain-hunting value funds enjoy more breathing room, he adds, because it can take many years for value to materialize.

If you do sell, check out some highly regarded funds that recently reopened to new investors. These include large-cap Dodge & Cox Stock Fund (DODGX)and Longleaf Partners Fund (LLPFX), small-stock Royce Micro-Cap Fund (RYOTX) and foreign-stock Third Avenue International Value Fund (TAVIX).

5. Was a mistake to have bought

No one likes to concede they were wrong, but denial can be costly if you cling to an investment you shouldn't have made.

Say you bought a focused China fund late last year, confident that investors would keep bidding up shares of the country's fast-growing companies. China funds have since fallen hard, and even though the correction may be short-lived, you now realize the volatility is too much.

Face facts. "Investors never want to admit they made a mistake," says Morningstar's Benz, "so they sit with wholly inappropriate funds in the hope they'll claw back to respectability."

If a fund makes you uncomfortable given your time horizon and risk tolerance, it's probably worth selling, Benz says. Be sure to account for trading commissions and tax consequences, she adds. Then mov