Burton Malkiel, shows in his great book A Random Walk Down Wall Street that the best funds in the 1970s lagged behind in the ’80s, just as the best funds of the 1980s failed to keep up in the ’90s. In fact, Malkiel finds that the top mutual funds from any long period usually end up under performing in the next. John Bogle, founder of The Vanguard Group, came to the same conclusion when he looked at the top 10 mutual funds leading up to the dot-com boom. Between 1996 and 1999 the funds produced an average annual return of 55%. Over the next three years, they lost 34% a year.

You can’t rely on past performance to predict a fund’s future returns, but how much it charges in fees can provide you with an important clue. Expensive funds perform worse over the long term than funds with lower fees. As strange as it seems, the less you pay, the more you get.

Surprised? Most people think that funds with higher fees have more money to spend on research and managers, so they should perform better. But that’s not the case.

Bogle showed this by splitting U.S. funds into four groups ranging from the cheapest to the most expensive. He found that the gross returns before fees were actually pretty even across all four groups  the pricey funds didn’t perform any better than the cheap ones. So the net return that investors got depended on how much they lost to fees. The more money that went to the managers, the less there was left for investors.

Study after study has confirmed this effect, including a Canadian survey done by Gene Hochachka, a former quantitative analyst for the Vancouver mutual fund company Phillips, Hager & North. He found a straight one-for-one correlation between fees and returns. For every percentage point your fund company charges you in fees, your return goes down by one percentage point.

How to pick it

Given that, your best bet is to reduce your fees by investing in a low-cost portfolio of index funds.

If you’re more comfortable with prepackaged investments, you might prefer a low-cost balanced fund. Suzane Abboud, our mutual fund specialist, recommends the CIBC Monthly Income Fund, TD Monthly Income Fund or the RBC Monthly Income Fund as decent choices. Nothing is guaranteed, but by reducing your fees you’re improving your odds  and that’s what smart investing is all about.

But what were they? SmartMoney.Com went in search of the Great Depression’s best buys, with help from the Center for Research in Security Prices at the University of Chicago’s Booth School of Business. The CRSP crunched numbers to find the 50 best performing stocks from 1932 to 1954 by accumulative total return. The result: A dream portfolio for the greatest investors of the Greatest Generation.

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We started with 1932 because, while the famous market crash occurred in 1929, it did not hit rock bottom till nearly three years afterward. Uglier, the Dow Jones Industrial Average did not regain its precrash level till 1954, meaning it took more than a couple of decades to make investors whole.

Looking over the list is a reminder of days gone by and a time when company names were straightforward and mundane. No Navistars or Altiras here. Fans of “The Simpsons” may recall that Mr. Burns had put money into the fictional Amalgamated Spats, but in real life he should Doubled Down on Electric ship and National Acme Co. The former, which still makes submarines to this day as a unit of General Dynamics, returned a whopping 55,000 over those 22 years. National Acme it made machine tools, not giant slingshots for perpetually irritated cartoon coyotes returned more than 10,000.

We’ve taken the complete list of 50 top investments and selected 15 of the most telling. One thing many of them share and a factor that may resonate with investors today, given the Obama administration’s stimulus plans is the affect of big shortage spending. New Deal, World War II and Cold War outlays fueled many of these stocks. Here, then, is our look at many of the greatest Great Depression stocks.

1. Electric Boat: Unsinkable Submarine Maker

Cumulative Total Return 1932 to 1954: 55,000 Rank in Top 50: 1
Where is it now? A unit of General Dynamics
Churning out hundreds of PT boats and submarines throughout WWII as well as building the U.S.S. Nautilus, the world’s 1st nuclear sub, throughout the Cold War more than kept this stock afloat.

2. International Paper &amp, Power: Paper, Not Plastic

Cumulative Total Return 1932 to 1954: 30,503 Rank in Top 50: 4
Where is it now? International Paper
Long before plastic packaging or the digital age, for that matter, paper Ked When it came to communication and containers. Indeed, four of the 50 best stocks from 1932 to 1954 were in businesses that made paper, paper bags and corrugated cardboard.

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Visit the Banking &amp, Budgeting Center 3. Zenith Radio: Tuned In

Cumulative Total Return 1932 to 1954: 24,146 Rank in Top 50: 7
Where is it now? Part of LG Electronics
Once upon a time radios were so big they were not personal buyer electronic devices, they were furniture. Back then American, not Asian, manufacturers dominated the market for civilian and military use.

4. Douglas Aircraft: Bombs Away

Cumulative Total Return 1932 to 1954: 23,586 Rank in Top 50: 8
Where is it now? Bloodline leads to Boeing
It is little wonder a military freelancer that helped make the B 17 bomber as well as iconic civilian planes like the DC 3 and DC 9, could fare well throughout WWII and the Cold War. North American Aviation P 51 fighter, B 25 bomber also made the list.

5. Minneapolis Honeywell Regulator: Thermostats Were Hot

Cumulative Total Return 1932 to 1954: 21,608 Rank in Top 50: 9
Where is it now? Honeywell International
Central heating is taken for granted these days, but only thanks to pioneering advances like the company’s original Butz Thermo Electric Regulator “damper flapper,” which helped keep offices and factories at just the right temperature.