Three years ago this week, I started this column by noting that for every definition you could come up with for the word "stupid," there were dozens of investments out there to fit the bill.

I was wrong.

Whether your favorite definition of stupid is "lacking normal intelligence," "foolish," "irrational," "pointless," "dim-witted" or any other, there are thousands of investments that fit the bill.

But as Stupid Investment of the Week celebrates its third anniversary, it's time to take a break from pointing the finger at specific bad situations to consider what investors should take from the entire experience, the conclusions that can be drawn from a few years of finding cases that are "less than ideal for the average investor."

The idea for the column is simple: By showcasing characteristics that make certain investments idiotic choices for ordinary folks, it should be easier for those typical consumers to find similar flaws in their own holdings or in issues they are considering.

The "average consumer" or "average investor" is critical to the analysis, because that rules out the day traders, short-sellers or folks who eat, breathe and sleep the market. Instead, the average guy gets ideas from talk radio, television or the newspaper — as well as tips, rumors and suggestions from friends and neighbors — and falls in love with a concept without being able to research it sufficiently to make a full case of pros and cons.

In many instances, the problem may have less to do with the investment than with whether it fits the individual investor. There are times when a hot stock might be perfect for a trader, but lousy for the average buy-and-hold guy; likewise, certain insurance and annuity products work for a portion of the savings community, but are wrong for the typical buyer.

After three years in doing this, I think I have developed a pretty good "stupid detector." Here are the things that routinely set it off, and that probably should be loaded in every consumer's mind as they try to avoid the kinds of issues that make this column.

High Costs

The harder it is to make money after you pay the freight, the more likely you've got a poor investment choice. That's not to say some mutual funds, insurance policies and other securities can't overcome costs, but most don't.

Comparison shopping is crucial, especially in issues — like insurance policies — where the costs, or the value of what you are buying, is not as obvious as a published expense ratio. In some cases, you need to examine the same investment product from two or three different issuers in order to determine if costs are reasonable.

Mass-Market Products

Some of the worst investment products are the ones priced for "average" customers. That includes most insurance plans sold on television, where a bare minimum of shopping around is almost always guaranteed to produce a superior result.

Typically, products for the masses also play up the convenience angle; while they are telling you how easy it is, they're hoping you won't recognize how expensive it is.

A Never-Give-Up Sales Pitch

The very first Stupid Investment of the Week was investment notes from American Business Financial Services, and those clowns continued to send invitations to invest every few weeks, right up until the firm filed for bankruptcy protection and suspended sales and redemptions for investors.

Likewise, if you request information on the Gerber Grow-Up Plan or the Young American Plan — two lousy life insurance policies on children — or for the AARP Guaranteed Acceptance Life Insurance plan (a bad idea for grown-ups), you may be in for mailers until your loved ones are collecting on your life insurance.

Irrational Exuberance

All too often, average investors only find out about an investment after it has come into vogue, by which time it may be ready to hit the skids. Some of the worst investment choices are the ones that appear to be can't-miss opportunities; sometimes, the people who are pumping up the value of the investment are the ones who stand to profit from their own recommendation.

If someone gets excited about an investment and is trying to get you excited, consider the source. Even if they don't stand to gain from getting you interested, they may just be trying to justify their own decisions.

An Ability to Ignore the Trouble Spots

In any investment situation, look for all of the warts and blemishes. Sales pitches frequently point out the positives without noting the problems. In insurance products, it might be surrender charges or factors that limit returns; in stocks it may be a story that is not supported by fundamentals. Investors can have terrific debates on stocks that have great potential and horrible balance sheets, but they seldom ever disagree over a company that can put it all together.

Poor Governance and Questionable Investment Premises

Some investments stink because of how they are constructed, the style of management or the ethics of executives. These flaws aren't always evident at surface level, but when uncovered can quickly turn an investment that looks good into an ugly situation.

Massive Uncertainty

There aren't many sure things when it comes to investing, but some situations go beyond the norm. These include bankruptcies, cases where regulators have become involved, circumstances where management has made outrageous statements, significant management departures and more. There certainly can be hope in each of these situations, but the average investor typically can't tell whether that hope is real, or simply a prayer.

The biggest hope realized in three years of writing this column has been that many of my best ideas have come from readers, so keep the questions, concerns and suggestions coming. Better yet, if you are pitched an insurance policy, variable annuity or some other financial product that you think has stupid written all over it, send me the paperwork (P.O. Box 70, Cohasset, MA 02025-0070).

The biggest disappointment in three years of Stupid Investments was my effort to follow up on a two-page advertising in the Weekly World News — the tabloid that focuses on aliens, Bigfoot and other phenomenon — that suggested consumers "Rub the Buddha for Money!" It was an ad for a Buddha medallion — including "a free diamond in the Buddha's belly" — plated with 14-karat gold that you're supposed to rub "when you want to pay off debts," "when you want to buy a house," "when you want to go on a long-overdue vacation," and "when you want to buy a new car, TV, boat or whatever you wish."

The Buddha cost $20, shipping and handling included, and I was very much looking forward to trying it out and reporting on the results. Alas, my money order sent to the "World Marketing Group" was returned to sender, unopened. Worst of all, I'm out a buck or two for the money order, and I have no medallion to rub that could get the cash back for me.

Copyright (c) 2006 MarketWatch, Inc.