From The Guru Investor:

In an article for RegisteredRep.com, hedge fund guru Joel Greenblatt takes a look at why so many mutual funds fail to beat the market averages over the long haul, and offers tips for how the "little guy" can beat the market.

One big thing that hurts mutual fund performance, Greenblatt says, is fund fees, which can chop 1%-2% off your profits. Another problem, he says, is that the quest to accumulate assets (which funds want because it leads to more money made in fees) often can hinder performance. "To get big and take large positions, fund managers tend to go for big, well-known stocks," Greenblatt writes.

"But, there can be big advantages to looking at smaller companies. These companies are often too small for large investment funds to buy and for Wall Street firms to spend money on doing research. Less competition from other buyers and less available Wall Street research often mean a greater opportunity to find bargain-priced stocks among these lesser-followed small-capitalization companies."

Greenblatt says successful investors like Warren Buffett wish...

Read full article...

More on investing:

How to prevent the vast majority of investing mistakes

The five disciplines that will make you a better investor

Fantastic advice every novice investor should read immediately