A truly good value can take some work to spot

In other words, has the company been reinvesting its earnings into its most productive business lines?

If you feel that picking bargains yourself is too difficult, consider investing in a fund that aims for value. The five large-company value funds with the best five-year records are in the chart.

You might also consider a closed-end value fund. These funds trade on the stock exchanges, just like stocks. Unlike most mutual funds, however, a closed-end fund's price rarely reflects the actual value of its holdings. Instead, it signals investors' opinion of the fund's prospects. And when investors are pessimistic, you can often find some real deals.

Consider Gabelli Dividend & Income Trust gdv. Its holdings are worth $21.41 a share. But its share price is $18.39 — or about a 14.1% discount. Were the fund to liquidate and distribute the proceeds to shareholders, they'd get a $3.02 profit per share.

Because the fund is a value fund, it's presumably buying bargain stocks — which you, in turn, are receiving at a discount. Other similar funds are Dreman/Claymore Dividend & Income (DCS), dcs BlackRock Strategic Dividend Achievers bdt and MFS Special Value Trust mfv.

True bargains may indeed require a form of X-ray vision. But these funds, at least, are one easy place to start your quest for value.

John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. Click here for an index of Investing columns. His e-mail is jwaggoner@usatoday.com.

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