What are My Investments and How are They Doing So Far?

It’s the middle of the year and it’s time for a mid-year investment portfolio checkup.

I have talked about my investments many times in the past and shared with everybody what I was investing as well as performance of my portfolios. The last time when I got into details of my investments was May 2007 , more than one year ago.

That was then. In the past year, we all know what happened in the stock market and if you read my monthly net worth update, then you pretty much have an idea how my investments were doing lately. The theme is: Down. Not a a little bit, but a lot . Despite big drops in stocks, I haven’t made any dramatic change since the current crisis began a year ago. At the end of last year when I was evaluating my IRA investment, the only change I made at that time was moving some money from bond (invested in VIPSX) to stock (invested in VTSMX). And that was it, no change in my taxable mutual fund investments.

Last week, The Money Writers decided to roll out our first group write project by sharing with readers our portfolios and returns of our investments so far this year. The goal is to share our investment ideas and, hopefully,

Holdings

After cutting a couple of overlapped funds last year, I trimmed the number of mutual funds I own down to 10, which I think is an appropriate number. I don’t want to be a fund collector, but want to have exposures in the asset classes that I consider as essential: Large-cap, mid-cap, small-cap, foreign equities, precious metal, and real estate. As of July 1, my holdings, and their respective shares in the portfolio, are

1. CGM Focus Fund (CGMFX): 23.95%
2. Dodge & Cox International Fund (DODFX): 15.04%
3. Oakmark Equity & Income Fund (OAKBX): 11.16%
4. Dodge & Cox Stock Fund (DODGX): 10.82%
5. Buffalo Small Cap Fund (BUSFX): 9.19%
6. T. Row Price Small Cap Value Fund (PRSVX): 8.85%
7. Tocqueville Gold Fund (TGLDX): 7.31%
8. T. Row Price New Era (PRNEX): 7.24%
9. Alpine Dynamic Dividend (ADVDX): 4.07%
10. Third Avenue Real Estate (TAREX): 2.36%

In May 2007, CGMFX was under 10% of my overall holdings and DODFX was the largest piece. Now, the market value of CGMFX, which has been benefiting from the surging prices of commodities, especially oil, is nearly a quarter of my holdings. The biggest disappointment here is DODGX, which is my core investment in large-cap domestic stocks. Given the track record of Dodge & Cox, it’s really frustrating to see DODGX struggle, lagging its peers in performance recently. However, I still have faith in D&C.

You may have noticed that I don’t have any bond funds in my taxable account. Right, I don’t own bond fund because 1) I don’t think I need a bond fund; 2) I am buying I-Bond every month.

Asset Allocation

The asset allocation of the above investments look like the following chart.

Comparing to 14 months ago, the asset allocation is almost identical between now and then, which U.S. stocks down a little bit. On the other hand, I am pretty happy with the nearly 40% invested in foreign stocks (not only from DODFX, which is my core foreign investment, but also from CGMFX and ADVDX), which is quite large. The reason is that I believe foreign stocks present more growth opportunities than domestic stocks (though there are also associated risks), especially when U.S. stocks are struggling. Given that the U.S. GDP is only about a quarter of the world overall GDP (Wikipedia), 40% in foreign stocks isn’t too large to me.

Valuation

The biggest change in valuation is the nearly 20% increase in large-cap, which is largely due to the increasing share of CGMFX, a large-cap blend fund. At the same time, small-cap (PRSVX and BUFSX) dropped significantly. Small-cap stocks had a pretty good run since the beginning of this decade, but the party may be over because small companies could face more difficulties in obtaining credits amid turmoil in the financial market.

Individual Stocks

In addition to mutual funds, I also hold a bunch of invididual stocks/ETFs in my taxable account. Some of the largest holdings are:

• Altria (MO)
• BlackStone (BX)
• China Life Insurance (LFC)
• E-House (EJ)
• Phillip Morris International (PM)
• PowerShares Golden Dragon Halter USX China (PGJ)
• PowerShares Water Resources (PHO)
• PowerShare International Dividend Achiever (PID)
• ValueClick (VLCK)
• Visa (V)

I also have a few small stocks that I consider as speculative plays such as those in my Zecco play-money account. Though I have no plan to hold those stocks for long, I wasn’t able to make quick money out of those short-term investment either

Performance

Now it’s the hard part.

When I updated our net worth last month, I mentioned that it has lost 6.53% on paper. However, the losses in my investments YTD were skewed because I have been adding new money to, for example, mutual funds in taxable accounts as well as 401(k) and IRA accounts. Excluding all the new money, I am deep in red so far this year. Here’s how the real picture look like:

• Cash: +1.16%
• Stocks: -22.82%
• Mutual funds: -3.43%
• Retirement: -11.05%

The overall return is about -12.2% at the end of June, which matches pretty well the return of the S&P 500 in the first six months of 2008.

How Are The Money Writers Doing?

Curious about how the rest of The Money Writers are doing? Then take a look yourself:

• Brip Blap: -9.85%
  
• The Digerati Life: -7.3%
• Generation X Finance: -13.32%
• Lazy Man and Money: -7.22%
• Million Dollar Journey: -1.32%
• Money Smart Life: Really BAD
• My Dollar Plan: -7.8%

Sadly, nobody is above the water this year.

How’s your portfolio doing so far?

Related Articles You Don't Want To Miss

1. What are My Investments?
2. Asset Allocation of Our Mutual Fund Investments
3. The Best Investments in IRA Accounts
4. Tax Consequences of Our Taxable Investments for 2006
5. Making the Case of Having Alternative Investments in Portfolio
6. Our Investments in DODFX
7. March 2007 Score Card — Part II: Asset Allocation
8. Firstrade to Start Charging Fees for Mutual Fund Investments