Great Investments for Busy People

There are many here among us, Bob Dylan once sang, who are hard-core stock jocks. OK, Dylan didn't sing that last part, but it's true nonetheless. Finance geek that I am, though, I'm not an investor of the stock-jock persuasion.

Don't get me wrong: I am a number-crunching Fool, and I can happily while away the hours running screens for, say, long-haul overachievers that have lagged the S&P over the last year. Citigroup (NYSE: C) and UnitedHealth (NYSE: UNH) fit that profile, as do Duke Energy (NYSE: DUK) and Countrywide Financial (NYSE: CFC). Companies with juicy earnings-growth prospects but below-market price-to-earnings ratios -- such as GlobalSantaFe (NYSE: GSF), and Freeport-McMoRan Copper & Gold (NYSE: FCX) -- will likely get my attention, too, as will the dreaded "downside surprise."

Earlier this year, for example, Apple shares tumbled by more than 6% in a single day, after the company issued "soft guidance" for second-quarter revenue. For prospective investors, that was good news: When Wall Street overreacts and an otherwise solid company falls hard, it can be a fine time to add the firm to your "further research" list -- all the better to buy low (or at least lower) in anticipation of selling high.

Window-shopping
Ultimately, though, when it comes to individual stocks, I'm mainly a window-shopper: I own only as many as I actually have time to research and follow. Meanwhile, the bulk of my nest egg is plunked down on what Vanguard founder Jack Bogle has termed "the finest vehicle for long-term investing ever designed:" mutual funds.

To my way of thinking, Bogle has it exactly right. If you have plenty on your plate already -- a full-time job, say, and friends and family you want to hang out with -- world-class mutual funds are the no-muss, no-fuss way to build wealth. Rather than spending countless hours in a headlock with the commentary of error-prone analysts, or decoding cryptic (and frequently misleading) earnings announcements, your fund research can take the form of a straightforward job interview -- with you on the hiring side of the table.

Among other things, when you're in the market for a mutual fund, you should ask:

How has the fund fared on that manager's watch? Past performance doesn't tell you a thing about a fund's prospects if it doesn't reflect the work of its current stock-picker-in-chief.

Does the manager invest in his or her own fund? If not, why should you?

How has the manager fared in up markets and down? When you have a talented manager at the helm, market slumps can represent prime buying opportunities -- and juicy gains for shareholders over the long haul.

The Foolish bottom line

There are other moving parts, but those four questions will go a long way toward helping you zero in on the cream of the fund industry's crop. I've been asking (and answering) each of those questions since the Fool's Champion Funds investing service first opened for business just more than three years ago, and so far, so good: As a group, our recommendations have outpaced the market by a double-digit margin.