Making Money Anywhere

These great managers are not boxed in by a particular style.

Investment legends like Peter Lynch, Warren Buffett and John Templeton are imaginative, instinctive types. When he ran Fidelity Magellan a generation ago, Lynch bought shares of everything from behemoths, such as Fannie Mae, to small local banks. Buffett also invests in companies of all sizes -- Coca-Cola, Moody's Investors Service and See's Candies, to name a few of varying sizes. Templeton roamed the globe and didn't care if a stock was labeled growth or value as long as it was a good buy.

Alas, the fund-management business has veered in the opposite direction. The rise of rigid, style-box investing has pigeonholed many a fund manager into uniform-size companies, a uniform investing style and narrow geographical confines. If you were in a large-company growth fund early in the decade, when large-growth stocks were hideously overvalued, you were out of luck. If a manager spots a gem that sits outside the fund's assumed stomping ground, he or she may have to leave it be.

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Contributing Writer, Kiplinger's Personal Finance