Mutual Fund 'Mutts'

Another tech-heavy name on the mutt list is the (STNAX)SunAmerica Style Select Series - Focused Technology Portfolio. Its asset-allocation breakdown of 20.9% Internet, 19.0% telecom, 16.6% software, 14.6% computers, 13.2% semiconductors and 7.9% diversified financial services aggregates to a higher P/E ratio of 49.

After Apple Computer and Google, the fund's next largest holdings are Hewlett-Packard (HPQ), E*Trade (ET), Equinix(EQIX) and Energy Conversion Devices (ENER). The chances of political mistakes in Washington, D.C., pushing us back to the Stone Age are not that high, so there is no reason not to be bullish on technology for 2007.

There is no question that 2006 has been a tough year for real estate. From October 2005 to October 2006, the median price of a single-family home fell 3.4% to $221,300. Homebuilders such as Toll Brothers (TOL), Lennar (LEN), Pulte Homes (PHM), Hovnanian Enterprises (HOV) and KB Homes (KBH) have had to let workers go and have to give out perks like automobiles to attract new home buyers. All of these stocks bottomed this past summer but are well off their previous highs.

In this environment, the (EUEYX)Alpine U.S. Real Estate Equity fund, which holds all the above homebuilders, has managed to slip just 1.58% so far this year. It may be too soon to call the end of this rare downturn in real estate, but contrarians will tell you to buy when conditions look the most grim.

As far as stock- and fund-picking strategies go, I believe that identifying good companies and solid funds that had a bad year has more validity than the upcoming AFC/NFC Super Bowl indicator that gives a bullish signal with wins by old NFC teams. But just in case -- "Go Bears!"

>To order reprints of this article, click here: Reprints