January 21, 2012, Bob Brinker Increases Risk in Marketimer Portfolios

January 21, 2012.....Bob Brinker fans have known for years that Brinker recommends Vanguard Ginnie Mae Fund (VFIIX), but he has lowered holdings in that fund and increased the risk in his income and balanced portfolios.

 1. Brinker has told Moneytalk listeners that he  includes the Vanguard High-Yield Bond Fund (VWEHX) in his income portfolio and talked about how well they have done. 

 Last Sunday on Moneytalk, Bob Brinker told a caller that he added Double Line Total Return Fund to his income portfolio because he thinks that Jeffrey Gundlach is the best bond manager in the world today: ".....the fund has had an outstanding record. The reason for that, it is my opinion that the fund manager on that fund is the best there is out there in the world income investing....That's why I added that fund to my income portfolio." 

 2. Double Line is invested in 26%  BELOW-B  rated bonds.

 Another risk increase happened when Brinker  lowered the percentage of bond holdings in his "balanced" portfolio III by adding the Vanguard Wellesley Income Fund a year ago. 

 3. The Wellesley Fund is invested in 35% equities. That brings  Brinker's "balanced" portfolio to more than 50% weighted in equities.

 Now here in January 2012, Brinker increased risk in all three model portfolio by adding the Akre Focus Retail Fund (AKREX).

 4. Akrex Fund is more risky than the Vanguard Total Return Fund that it replaced because it lacks diversity.   It also breaks Brinker's 4% rule in most of its top-ten holdings -- the top-ten holdings represent 63% of total holdings, and  the top three are almost 10% of the fund. 

Brinker is  still very bullish and expects equities to do better than bonds this year: "My expectation is that right now, the equity portion, the equity portfolios are in a better position in terms of their total return potential than the fixed income..."

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