Fabian's Favorite Funds
08/08/2003 12:00 am EST
Doug Fabian, editor of Successful Investing, has taken on two new projects. First, he has launched a new service called VIP Investor , a mutual fund service that will seek above-average gains through specialty funds and ETFs. He also has begun a $500,000 portfolio -- backed by his own money -- which he'll try to double in value in the coming year.
In the just-launched VIP Investor , Fabian recommends that investors take a position in Rydex Juno Fund (RYJUX ), a special situations fund that rises as long-term interest rates rise (it's inversely correlated to the price of the 30-year US Treasury Bond). Technically, the fund is above its 50- and 200-day moving averages. There's nothing quite like jumping on an early trend. I'm sure many of you are aware that bond funds are going down and long-term interest rates are on the rise -- maybe you're refinancing a home or buying a new one and discovered this during the process -- but you probably didn't know that you could invest in a fund that went up with interest rates. And, that's exactly what Juno does."
Regarding his "Million Dollar Challenge" portfolio, Fabian advises his subscribers not to follow his moves. He notes, "My mission for this venture is strictly to prove that you can achieve extraordinary gains using mutual funds. I plan on taking more risk with my own money than I would ever suggest to my subscribers." His initial purchase for the portfolio was ProFunds Rising Rate Opportunity (RRPIX). Fabian says, "This fund is the first stop for my $500,000. This fund is a special situation fund that allows you to make money from rising interest rates. It also has a little extra performance punch, by using a small amount of leverage in the portfolio. This fund carries more risk than Rydex Juno, as it seeks 125% of the inverse price of the 30-year Treasury bond."