Want to Win at Fund Investing? Learn From Longleaf

Even though Longleaf Partners is closed to new investors, you can learn a lot about how to pick funds -- and stocks -- from the fund and its managers. Co-manager Staley Cates gave me a rare interview.

No one ever said finding good mutual funds was easy. But there are some surprisingly simple things you can do to stack the odds in your favor. Longleaf Partners, one of the best mutual funds, is a great example of a fund that does almost everything right. It's closed to new investors, but you can learn a lot about how to pick funds just by looking at Partners' attributes. I recently interviewed co-manager Staley Cates.

For starters, Longleaf is a specialist -- a smart thing to look for when you're shopping for mutual funds. Funds that are run by companies that specialize in funds tend to do better than those run by financial supermarkets, insurance companies or multinational banks. And funds that stick to just one kind of investing style or segment -- be it small companies or undervalued stocks -- often perform best of all. At Memphis-based Longleaf, you'll find just three funds, and all practice the same brand of value investing.

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Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.