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Wednesday, July 29, 2009

Bob Brinker's Fixed-Income Recommendations

July 29, 2009....Bob Brinker is well known for recommending Vanguard's GNMA Fund (VFIIX). Bob Brinker has talked about it on almost all Moneytalk programs throughout the 2007-2009 mega-bear market even though it is only 20% of model portfolio III (balanced fund).

What Brinker has not talked about (and has not allowed any calls about) is the fact that in 2003, he also began recommending Vanguard High Yield Fund and included it in his "off the books" fixed-income portfolio.

In the April 2003 issue of Marketimer, Brinker wrote: "Effective at the close on April 11, we are reducing our page seven all fixed-income portfolio weighting in the Vanguard Ginnie Mae Fund from 50% to 35%, we are introducing a 15% weighting in the Vanguard High-Yield Corporate Fund." [VWEHX] Brinker has maintained this high yield holding until the present time.

While almost every weekend, Brinker accepts kudos from callers about his Ginnie Mae recommendation, absolutely no one has been allowed on the air to ask about the gut-wrenching ride they took with the high yield fund. I call it "cherry picking" when Brinker touts his cherries calls and buries his calls that are "the pits." 8^)

VWEHX went from well over $6 per share to a low of $3.90 in December 2008. It is now back above $5 per share.


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