Now that the insurers of Who Wants to Be a Millionaire? are complaining that the questions are too easy, here's one that isn't: How could you have scored a 160% gain on your money in the past 12 months? Of course you've never heard of it -- even though this little-known large-cap growth fund has posted huge returns, pushing it to the top of the charts. ( RIGAX) Reserve Informed Investors Growth is teeny-tiny -- just $10 million in assets. Plus, its adviser (also not likely on your radar screen, Reserve Management) does absolutely no marketing. But the numbers by themselves would make quite an ad. It has beaten the S&P 500 index by more than 150 points over the past year, and even in this year's can't-make-up-its-mind market, it's up 25% in less than two months. Long-term returns ain't shabby either. Reserve is one of the top performers, even in the glowing growth category. For the past three years, according to Morningstar, it delivered 60% a year on average; in the last five years, it's up an average of more than 40% annually. No secret stock-picking style here -- but one that certainly isn't conventional. Manager Tom Fitzgerald, whose firm was founded more than 40 years ago and manages some $350 million, says he has a "total disdain for Wall Street research." No buy or sell signals from analysts -- traditional tools for many investors -- for Fitzgerald. "We prefer to be on the side of people running companies, instead of people running money." That means going with stocks of companies that back up their beliefs with bucks. "It is far more prudent to invest in stocks which some of the nation's more knowledgeable investors own or are buying with their own money, rather than to chase fad or glamour stocks masquerading as disciplines," says the fund's prospectus. A number of signals, gleaned from countless Securities and Exchange Commission filings, tell Fitzgerald that executives -- or "informed investors" as he calls them -- are putting their money where their mouths are:
Help me out, here. What's the worst "conventional wisdom" about getting started and investing in mutual funds that you've ever heard? I've got a long list, but want to hear from you, too.
- Van NetNet Tech-Tech Aggressive Growth Highflier Fund
Reserve Informed Investors Growth
Marrying a millionaire
- Officers are buying shares on the open market. A big outside investor posts a 13-D disclosure, which shows the purchase of at least 5% of the company's stock. At least one-fifth of the stock is owned by managers and directors. A company announces it will buy stock on the open market.
Help me out, here. What's the worst "conventional wisdom" about getting started and investing in mutual funds that you've ever heard? I've got a long list, but want to hear from you, too.