Diversification Pays Off for the Holiday Portfolio

Let the summer fun begin.

On this Memorial Day, it's time once again to take a look at TheStreet.com's Holiday Portfolio.

Given the stock market's impressive strength, I'd expect the performance of this diversified basket of five equities to correlate roughly with market averages. And, well, that's essentially what happened.

The portfolio's energy component has helped boost the results, while weakness in real estate and the major bank holding have kept the overall performance about in line with the broader market.

Before looking at specifics, let's revisit the purpose behind the Holiday Portfolio, now in its sixth iteration.

Across All Seasons

The concept behind the Holiday Portfolio is straightforward: I select a group of five stocks that I believe deserve watching over the next 12 months, and I follow them -- regardless of their performance -- throughout the year.

I'll revisit the portfolio on each market holiday and, at times, make comments about the stocks in RealMoney's Columnist Conversation. The only way a stock is removed from the portfolio is if it merges with another company or ceases to trade on a major exchange.

The portfolio serves two purposes. First, it follows the fundamental progress of a group of stocks over a lengthy period of time.

My hope is that the portfolio will serve as a forum for in-depth discussion of investment decisions and company strategy, and reinforce the importance of ongoing portfolio analysis.

Second, it provides an opportunity to look at both short-term trading strategies and longer-term investment strategies with the same stocks.

Today, we review the five stocks selected at the beginning of 2007 and the outlook over the coming weeks.

The 2007 Holiday Portfolio Memorializing Average Results
	Recent Price	Price 12/31/2006	Price Change	Current Dividend	Current Yield	Yield At Cost
Altria (MO:NYSE)*	$70.47	$64.41	9.41%	$3.44	4.88%	5.34%
Archstone-Smith (ASN:NYSE)	$55.82	$58.21	-4.11%	$1.81	3.24%	3.11%
Bank of America (BAC:NYSE)	$51.05	$53.39	-4.38%	$2.24	4.39%	4.20%
Carrizo Oil & Gas (CRZO:Nasdaq)	$38.32	$29.02	32.05%	$-	0.00%	0.00%
Microsoft (MSFT:Nasdaq)	$30.17	$29.86	1.04%	$0.40	1.33%	1.34%
Unweighted Average			6.80%		2.77%	2.80%
S&P 500			6.28%
*Adjusted for Kraft transaction Source: Company Reports, Bloomberg, TSC Research