on the bottom. The key trait is long-term outperformance. By winning in the long run, you have the ingredients for successful investing.

Too many investors follow a hot manager only to be disappointed. Then, they jump ship when things don't work and run to the next hot manager. Not a sound strategy and one that Dan Wiener, editor of The Independent Adviser for Vanguard Investors, has spoken out against for more than 17 years.

Find a Fund Strategy You Believe In

Indisputably, Dan is the expert on Vanguard funds. He's been tracking Vanguard's performance and management talent since The Independent Adviser for Vanguard Investors published its first issue.

Dan and I both agree that investors need to follow a more disciplined approach to investing in mutual funds. Namely, find a manager who sticks to a strategy you believe in–not the other way around.

(In fact, Dan Wiener recently interviewed two titans of the fund trade, Vanguard Selected Value's Jim Barrow and Mark Giambrone to get their take on the industry's ups and downs. Here's what they had to say.)

Stay Away From the Hot Hand

I would recommend following a more disciplined approach. Find a manager who follows a style that you believe in and make sure that manager has a long-term track record that has beaten the market consistently.

If you really need to follow a gimmick, I might suggest that you follow the manager who has the cold hand. In many cases, that cold hand becomes the hot hand. Of course there is risk that manager stays cold, but if the basics of good management philosophy and long term track records are in place, such risk is low.

In Dan Weiner's The Independent Adviser for Vanguard Investors, he discusses a fund with a cold hand, Vanguard U.S. Growth. This might be the place to implement a buy-the-cold-hand strategy.

At a minimum, stay away from the hot hand.

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