Finding solid, growing companies isn't rocket science. Many terrific companies are all around you, and every now and then, they'll trade at reasonably attractive prices.

Some stocks, as you probably know, can perform phenomenally well, even in unexciting industries such as retail or beverages. Consider Chico's FAS (NYSE:CHS), for example, which has grown at an average annual rate of more than 52% over the past decade, enough to turn $5,000 into more than $300,000. Drink maker Hansen Natural gained an average of 60% each year in that same period. These are, admittedly, extreme examples, and few people were aware of these firms a decade ago.

You don't have to find small, esoteric companies to do well, though. Urban Outfitters (NASDAQ:URBN), for example, has increased in value nearly eightfold over the past decade, at an average annual rate of 23%, while Sunoco (NYSE:SUN) has grown by an average of 22% annually in the same period, as has Target (NYSE:TGT).

But if you're not confident of your stock-picking abilities, you don't have to go beyond your comfort zone to find great investments.

Consider funds
You'll find more than 7,000 mutual funds out there, and yes, many of them stink.

But there are also plenty of top-notch funds with smart managers, reasonable fees, and solid track records. Don't think of opting for mutual funds as any kind of capitulation. I've recently been moving big chunks of my own nest egg into mutual funds, and it's not because I'm throwing in the towel on my hopes for high returns. It's more a matter of realizing that there are people out there who can make my money grow faster than I can on my own.

Consider the 10-year average annual return of these mutual funds:

Fund 10-Year Annualized Return Top Holdings Include ...

Bridgeway Ultra-Small Company Fund


Hansen Natural, 11% of net assets

CGM Realty


SL Green Realty, 6.5%

Calamos Growth


Google (NASDAQ:GOOG), 3.1%

Fidelity Select Brokerage


American International Group, 9.1%

Vanguard Health Care


Schering-Plough (NYSE:SGP), 4.3%

Julius Baer International Equity


Vodafone, 1.2%

Legg Mason Partners Aggressive Growth


Amgen (NASDAQ:AMGN), 4.4%

Data from Morningstar.

See? Some funds out there do trump the returns of strong stock performers such as Urban Outfitters, Sunoco, and Target over the same time period. And all it takes is an average annual return of around 14% over five years to double your money.

So should you snap up shares of the above funds? Please don't. For one thing, some are closed to new investors. You should also research any fund before investing. Check to see how steep its fees are. Read up on the managers, and make sure they've been in place for at least a few years. Ideally, they should have a significant stake in the fund themselves. Beware of sector funds with great records, too -- an energy-oriented fund may do well in one decade only to stagnate in another.

Choose carefully
If you'd like to jump-start your research, let us help you. We'd love to introduce you to some market-beating funds with great managers, low fees, and outstanding track records via our Motley Fool Champion Funds newsletter. Try it for free, and see which funds our analyst Shannon Zimmerman recommends -- and why. Together, his picks have gained an average of 22%, versus 14% for their benchmarks. Shannon will introduce you to many great investing minds who can invest your money for you via their funds. He even maintains three model portfolios, listing appropriate funds for conservative, moderate, and aggressive investors. Balanced funds, small-cap funds, foreign funds, bond funds, value funds ... you name it, and he's got it for you. See for yourself.

Or learn much more in these articles:

This commentary was originally published on July 28, 2006. It has been updated.

Longtime Fool contributor Selena Maranjian owns shares of Chico's FAS. For more about Selena, view her bio and her profile. Vodafone is an Inside Value pick. The Motley Fool isFools writing for Fools.