NEW YORK (Money Magazine) -- Scour equities markets today, and you won't find many obvious deals. Yes, stocks have fallen 5% since the spring, roiled by concerns over Greek debt and a potential slowdown in global growth.
But the S&P 500 still isn't cheap: By one conservative measure, the market's trading at 38% above its average based on long-term profitability. So you have to dig deep to find investments at attractive prices that don't incur undue risk.
A bright spot for bargain hunters: real estate. Many vacation-home markets are down 50% or more from their peaks, making now a compelling time to acquire a second address.
Go where there's still value. One place to look: beaten-down megacap stocks. "Some big companies are making more money than they were three years ago but have the same valuations they did then," says Robert McIver, co- portfolio manager of the Jensen Fund. Or buy a fund with a proven record of finding value over the long run.
Best tech deals -- plus 4 expert picks
Check out an alternative fund. Want downside protection? Wealthy investors and institutions opt for pricey hedge funds, which try to smooth out returns by selling some stocks short.
Be warned -- it's not an easy strategy: The manager has to pick winners and losers. Wasatch Long/Short (FMLSX) has a solid long-term track record, says Morningstar analyst Nadia Papagiannis, and a fee of just 1.34%.
Buy a closed-end bond fund. Such funds typically pay higher yields (and are riskier) than traditional fixed-income options because they (a) invest with borrowed money and (b) sell a limited number of shares.
When those shares are trading for a lot less than the value of the underlying bonds -- say, owing to talk of interest rates rising -- it's time to buy.
The group as a whole isn't cheap now, but there are a few good deals, says closed-fund specialist Cecilia Gondor of Thomas J. Herzfeld Advisors. Fort Dearborn Income Securities (FDI), for example, currently yields 5% and trades at a discount of 8.2%, compared with a one-year average discount of 7.4%, and doesn't rely on borrowed funds. Look for more closed-end deals at cefconnect.com.
Go ETF. Exchange-traded funds have always been cheap. Lately firms such as Fidelity and Schwab have cut commissions on many widely traded ETFs, making them an even better value.
Vanguard Total Stock Market ETF (VTI) , for example, charges just 0.07% yearly, vs. 0.17% for Vanguard's index-fund equivalent, with no trading fees.
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To get the basket of stocks at the best price, set up an order with your brokerage to buy when the market dips 3% or more, says Edina, Minn., financial adviser Ross Levin.
Check out second homes. When housing heads south, the second-home market suffers most.
The median price of a vacation home has plunged from $204,100 to $150,000 since 2005, according to the National Association of Realtors. Homes that appeal to renters hold their value better, so buy in an area popular with vacationers in all seasons, advises Tom Kelly, co-author of "How a Second Home Can Be Your Best Investment."
36% OF VACATION-HOME BUYERS PAID ALL CASH LAST YEAR
What you don't know. To beat the other bidders on well-priced vacation properties these days, buyers need to flaunt their greenbacks. Aim to put down at least 30% to 40% to win, says Tahoe-Truckee broker Matt Hanson.
EXPERT PICKS
From Ryan Leggio, fund analyst at Morningstar.
10-YEAR ANNUALIZED RETURN 10%, EXP. RATIO* 1.0%, Fairholme (FAIRX):
Returns: 5-yr: 5.9%; 10-yr: 10%
Top five holdings: AIG, Bank of America, Berkshire Hathaway, Morgan Stanley, Sears
"Fairholme [a MONEY 70 fund] has had a losing streak recently due to manager Bruce Berkowitz's big bet on financials, which he believes are very undervalued. But all great managers look stupid sometimes. Unpopular bets can pay off handsomely."
10-YEAR ANNUALIZED RETURN 8.4%, EXP. RATIO 1.08%, Oakmark International (OAKIX):
Returns: 5-yr: 5.5%; 10-yr: 8.4%
Top five holdings: Daiwa Securities, Credit Suisse, Rohm, Toyota, Canon
"Manager David Herro was Morningstar's International Stock Fund Manager of the Decade in 2010. Despite losses from the Japanese tsunami, Herro argues that the market has oversold; he has 25% of OAKIX's holdings in Japan."
10-YEAR ANNUALIZED RETURN 11.9%, EXP. RATIO 0.85%, Yacktman (YACKX):
Returns: 5-yr: 10.6%; 10-yr: 11.9%
Top five holdings: News Corp., PepsiCo, Procter & Gamble, Microsoft, Coca-Cola
"Yacktman looks for stocks that are priced at a discount to their expected earnings. It's a simple process but one of the best. The fund's track record says it all: Over the past 15 years it has beaten 99% of funds with similar investment strategies."
10-YEAR ANNUALIZED RETURN 6.2%, EXP. RATIO 1.13%, Mutual Quest (TEQIX):
Returns: 5-yr: 4.7%; 10-yr: 6.2%
Top five holdings: Telefonica, GDF Suez, Royal Dutch Shell, British American Tobacco, Time Warner Cable
"This global value fund looks for firms facing short-term challenges and whose shares are therefore selling at deep discounts. The strategy has paid off: Over the last 10 years Mutual Quest has beaten 74% of its peers." 
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