Insightful Investing

The only stock funds on our recommended list that made any money were those in Real Estate, which is more than we can say about the average fund in this category. Neuberger Berman Real Estate (NBRFX) earned over 4% this quarter, while Cohen and Steers Realty Shares (CSRSX) returned almost 3%. Fidelity Real Estate Investment (FRESX) and Vanguard REIT Index (VGSIX) both gained almost 2%. The average Large Cap Value Fund broke even, while our two funds, TCW Dividend Focused (TGIGX) and Vanguard Windsor II (VWNFX) managed to pick up 0.6% and 1.2% respectively.

Buffalo Mid Cap (BUFMX) took the worst hit on our list, falling just over 7% for the quarter. Vanguard Explorer(VEXPX) and Royce Value Plus Inv (RYVPX) both fell by over over 5%. We will be keeping our eyes on these next quarter to see how well they bounce back.

There’s not much to say about Bond funds this quarter as none of our funds moved more than 1% in either direction. The leader was Westcore Flexible Income (WTLTX) with that 1% gain, while the trailer was Vanguard GNMA (VFIIX) was down all of 0.6%.

Our Mutual Fund Portfolios and Best Fidelity Funds have been updated through December 2005. The investment performance history of our mutual fund portfolios are tracked on our investment portfolio performance page.

Asset Allocation for 3rd Quarter 2006

There are no changes to the funds portfolios or our asset allocations for the 3rd Quarter of 2006.

Asset Allocation July 2006

It was a tough quarter in the financial markets as stocks gave back a good chunk of last quarter’s gains, and bonds continued to go nowhere. International stocks picked up less than 1% which put them in the lead for stocks in 2006, up just over 10% so far. In spite of 5% drop for the quarter, Small Cap stocks are not that far behind, with returns of just over 8% for the first 6 months of the year. Real Estate continues hold up well, even with the slow down in the housing market that has hurt home builders recently. Large Cap stocks were down 1.4% while Mid Cap stocks fell 2.6% in the second quarter.

Value stocks continue to outperform growth stocks, although this quarter it means that Value stocks broke even, while Growth stocks fell by over 4%.

Now that the Fed has decided to stop raising interest rates, Bonds have stopped falling as interest rates have steadied. We do not expect much to happen the rest of the year, but now at least you are earning considerably more interest than a year ago.

Investment Returns June 2006