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Roy's mutual fund portfolio
Buy and hold and hold: It's time for the annual peek at my mutual fund portfolio and, once again, little has changed over the past year. In August 2007, I sold one one perennial laggard -- FBR Large Cap Financial (FBRFX) -- and I invested the proceeds in Fidelity Select Brokerage & Investment. Also in 2007, I began directing some new retirement plan money into the Clipper fund, a long-term bet on managers Davis and Feinberg that, so far, has been grimly unrewarded. Otherwise, my portfolio holdings are exactly the same as they were a year ago. Here's my complete fund lineup as of December 31, 2007:


Roy's Mutual Fund Portfolio
(in alphabetical order within each percentage category)

More than 10% by dollar value
  • Allianz RCM Global Technology D (DGTNX)
  • Buffalo Small Cap (BUFSX)
  • Vanguard Total Stock Market ETF (VTI)
Less than 10% by dollar value
  • Bridgeway Ultra-Small Company Market (BRSIX)
  • Clipper (CFIMX) NEW
  • Cohen & Steers Realty Shares (CSRSX)
  • Fidelity Select Brokerage & Investment (FSLBX) NEW
  • Vanguard 500 Index (VFINX)
  • Vanguard European Stock Index (VEURX)
  • Vanguard Health Care (VGHCX)
  • Wasatch Global Technology (WAGTX)
  • Weitz Partners Value (WPVLX)

This is the tenth consecutive year that I've suffered the self-imposed indignity of portfolio revelation. For those of you who enjoy sweeping, historical dramas, here's how my fund portfolio has changed, or not, over the years (a red check means that I owned the respective fund as of the end of the indicated year):

Fund name
(alphabetical order)		Owned by Roy as of December 31:
20072006200520042003 20022001200019991998
Clipper








Cohen & Steers Realty Shares
Fidelity Select Brokerage & Investment








FBR Large Cap Financial
(formerly FBR Financial Services)
Invesco European
(since defunct)






Longleaf Partners







MAS High Yield Instl
(since defunct)








Allianz RCM Global Technology D
(formerly PIMCO RCM Global Technology D)



RS Internet Age
(since defunct)







T. Rowe Price European Stock







T. Rowe Price Science & Technology





Vanguard 500 Index
Vanguard European Stock Idx
Vanguard Health Care
Vanguard Total Stock Mkt ETF
(formerly Vanguard Total Stock Mkt VIPERs)


Weitz Partners Value


Has diversification worked for my portfolio? I suppose that question won't be answered until the full race has been run, but perhaps it's possible to come to some preliminary conclusions. I've owned four actively-managed funds (Cohen & Steers Realty, Allianz Technology, Vanguard Health and Weitz Value) for at least five full calendar years, and I thought it would be interesting to rank the yearly performance history of those funds relative to each other in a color-coded chart (if this sound a lot like the Callan Periodic Table of Investment Returns, it is):

2007 2006 2005 2004 2003
Allianz Tech
(DGTNX)

28.73% 		C&S Realty
(CSRSX)

37.13% 		Vang Health
(VGHCX)

15.41% 		C&S Realty
(CSRSX)

38.48% 		Allianz Tech
(DGTNX)
68.43%
Vang Health
(VGHCX)


4.43% 		Weitz Value
(WPVLX)

22.53% 		C&S Realty
(CSRSX)

14.88% 		Allianz Tech
(DGTNX)
17.46 		C&S Realty
(CSRSX)

38.09
Weitz Value
(WPVLX)


-8.54% 		Vang Health
(VGHCX)

10.87% 		Allianz Tech
(DGTNX)
8.46% 		Weitz Value
(WPVLX)

14.99% 		Vang Health
(VGHCX)

26.58
C&S Realty
(CSRSX)


-19.19% 		Allianz Tech
(DGTNX)
4.59% 		Weitz Value
(WPVLX)

-2.42% 		Vang Health
(VGHCX)

9.51% 		Weitz Value
(WPVLX)

25.38%


Weitz Partners Value has never been the top performer among this group, and it also seems to have spent a disproportionate amount of time at the bottom. Wally Weitz has made some horrendous stock picks in this fund, and he has failed miserably to protect investor capital from losses. Therefore, I will be bailing out of the Weitz fund, just as soon as I can find a suitable replacement (I own most of my Weitz shares through a retirement plan, which has relatively limited investment options). Each of the other funds in the chart has had at least one year at the top of the pack, and at least one year at the bottom, which is exactly what you would expect from a diversified portfolio (and something that many investors still fail to fully comprehend, especially the part about a good fund almost inevitably having a bad year).

Although this portfolio review is supposed to stop at December 31, 2007, it seems impossible to sign off without saying a few words about the market's "recent volatility" (as David so politely puts it). On the one hand, the current turmoil does seem different from any other market unrest that I have personally experienced over the past 25 years -- the problems are both more various and more interrelated, and the way out of our current troubles seem more difficult to map, at least over the next year or two. On the other hand, as a mutual fund investor, I have the same problem dealing with this downturn as I've had with every other downturn. No matter how much I take out of the market, I know that I would have absolutely no idea when to get back in the market. I also know that making a mistake getting back in the market, after getting out, would bother me a lot more than any loss I incur from holding all the way down. And then, of course, there's the possibility of making multiple mistakes trying to get back in the market, which would almost certainly make me start to foam at the mouth. I wish there was a better solution than buy-and-hold but, for me there isn't, so that's what I intend to do.