"I firmly believe that if you buy a stock at a low price, it's likely to produce above-average risk-adjusted returns," he said.

Did that money plunked down for a small company stock fund 18 months ago provide above-average returns?

Similarly, high readings have typically been followed by above-average returns over similar periods.

He also looks for above-average expected 12-month returns, based on an issue's price and yield.

Each fund produced those above-average returns with lower risk than the S.&P. 500.

He pays special attention to companies that have shown above-average return on equity over the last six years.

Both men said their systems had produced above-average long-term returns.

Venture capital investments are usually high risk, but offer the potential for above-average returns.

"We think this approach is too simplistic to provide long-term, above-average returns," she said.

It invests globally, looking for strong businesses with above-average returns.