Formula-Based Investing Pays Off In Long Run & Hennessy formula and employ complex computer models to crunch numbers and analyze years of historical data. “Emotions, hunches and fads should play no part in your investmentdecisions,” advises Neil Hennessy, who has built one of the fastest growing money-managementfirms in the country. Hennessy, named by Barron’s as one of the nation’s top 10 mutual fund managers, maintains that a disciplined, consistent, long-term focus is critical to investment success. He adds that as long as investors buy high-qual- ity funds andstick with them, they should be rewardedover time. Hennessy’s strategy, which con- sists of never wavering from proven formulas that use market data going back 50 years, has worked well—even during market turmoil. While past performance does not guarantee future results, the Hennessy Cornerstone Growth Fund, one of five no-load mutual funds managed by Hennessy, has outperformed the market in both good and bad times. Since its inception in 1996, Cornerstone Growth has returned over 15 percent annually. And the fund has Ss Ss wa —4— Cornerstone Growth Fund — numeric investment eeeeee gs= ee & & go smart it. According to Smart Money magazine, investors who follow the numbers instead of their gut can beat the market. For example, some “quantitative” : mutual funds use a 25,000 20,000 15,000 10,000 $30,560 > trying to outguess, outpick or out- 35,000 30,000 wa (NAPSA)—In today’s volatile stock market, many investors are looking for better strategies than Growth of a $10,000 investment in the Cornerstone Growth Fund* versus the S&P 500. tive formula. “Smart investors want to know exactly how their money is invested, and wefully disclose our strategy and perfor- mance,” says Hennessy. For his Cornerstone Growth Fund, Hennessy selects 50 common stocks with the highest oneyear price appreciation, which also meet the following criteria: Price-to-sales ratio below 1.5 e Annual earnings that are higher than the previous year Price appreciation over the past three and six months By annually rebalancing the portfolio, using the samestrict, quantitative formula, this strategy has produced strong returnsfor its investors—nearly double those of the S&P 500. “We base our successful strategy on a time-tested stock selection formula that is managed with strict discipline, not letting market fluctuations or headlines distract us from long-term goals,” Hennessy says. A recent article in Consumer Reports recommends investing in such small-cap mu- tual funds because “they have only had one year with negative returns—it was down less than 5 percent in 2002, a year that the S&P 500 lost over 22 percent. The Cornerstone Growth Fund visit www.hennessyfunds.com growth-oriented stocks and sticks to a highly disciplined, quantita- information. *Returnsare net of fees and expenses. invests primarily in small-cap, rewarded investors willing to hold on for the long haul.” Mutual fund investing involves risk, so please call (800) 966-4354, or call your broker for more
