1993 was a great year for mutual fund investors. I can't recall a time when so many investors made so much money, regardless of what type of mutual funds they invested in.

Out of more than 4,400 different mutual funds, only 66 mutual funds lost money last year. That means that at least 4,334 funds made money, which means that about 99 percent of all mutual funds made money.EVERYBODY MADE MONEY. Lipper Analytical Services has more than 100 different categories of mutual funds. The average return for each and every one of those categories was positive in 1993. From money funds to gold funds, everybody made money.

The results are even better than it sounds. According to the Mutual Fund News Service, 20 out of 23 equity categories averaged more than a 10 percent return, and a more impressive 13 out of the same 23 made more than 20 percent. Pacific region funds, which averaged 64 percent, and gold funds, which averaged 81 percent, were the two big winners.

DOOMSAYERS EAT THEIR WORDS. At this same time last year, the prevalent talk was how overvalued the stock market was and how a correction was overdue. According to those doomsayers, you should have hidden all your money in money market funds. Fine advice except that you would have missed out on some excellent mutual fund profits.

What's that tell you? Quite a few things:

ASSET ALLOCATION WORKS, MARKET TIMING DOESN'T. The key to making money while reducing risk isn't the ability to predict the future of the stock market. Why? Because it can't be done on a consistent basis.

Market timing requires that you be correct two times. First, you have to accurately know when to sell and then you have to know when to buy. And in between, Uncle Sam takes 28 percent of your profits in capital gains taxes.

Instead of trying to outguess the market, investors should diversify their dollars over a number of different asset classes. Keep some money in the domestic stock market, some in the international stock market and some in other assets such as junk bond funds, gold funds and short-term domestic bond funds. For a free copy of my current asset allocations and recommended no-load funds, call 800-445-5900.

With asset allocation, some of your money will always be making profits even if other portions of your portfolio are losing ground. A great book on asset allocation is Gerald Perritt's "Diversify Your Way to Wealth," $17.95, call 800-326-6941.

PLAYING IT SAFE IS DANGEROUS. If you're saving for a long-term goal like retirement, you don't have enough time to play it safe. The only way you will ever accumulate significant wealth is by investing in vehicles designed for growth - stock funds.

I've lost more money trying to avoid risk than learning how to manage it. Don't forget that the flip side of risk is reward, and over the long term, tolerating the fluctuations of the stock market will translate into financial independence.

There is a big difference between "aggressive" investing and "assertive" investing.

GOING TO CASH IS RISKY. There are a lot of different kinds of risk. The investment risk most people worry about is called market risk, which is the possibility that the stock market will decline. However, there are other obstacles to overcome.

Opportunity risk is the risk you take by avoiding the stock market. Investors who thought the stock market was too dangerous and stayed in cash in 1993 found out that the 3 percent they earned in money market funds paled in comparison to the profits they could have made on stock mutual funds, especially international stock funds.