Twenty-nine-year-old

Neil Gordon

has great expectations for his mutual funds. He'd like to see his $94,000 nest egg grow to $1 million in 10 years.

If his tech-heavy portfolio of five load funds continues to perform as it did in the past year, when all but one of his funds returned at least 23.5%, Gordon might have a real shot at it. But realistically, he is not going to see returns like that forever. And Gordon, a financial analyst for an insurance company in Boston, knows it.

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"Should I reallocate the portfolio if 1999 isn't going to be as lucrative as the past three years?" he asks.

We put that question to one of our

TSC

Portfolio Planners, Ron Roge, of

R.W. Roge & Co.

in Bohemia, N.Y. (To see how Roge's Golden Years Portfolio and our other planners' portfolios are faring, see the

Scoreboard.)

The first thing Roge did was apply a more realistic growth rate to the portfolio. "The market has been running around 15%

annual growth rate in the last 10 years," Roge says. "But historically, stocks have returned 11% annually."

Applying a 10% annual growth rate to Gordon's portfolio yields what Roge calls the "first reality check": In 10 years, the portfolio will be worth $243,000 -- not bad, but not a cool million.

The second reality check comes when Roge runs the portfolio through some software to compare the holdings of each fund. Many of the funds hold the same stocks, based on recent holdings reports. Four funds own

Microsoft

(MSFT) - Get Report

, for example. Three own

America Online

(AOL)

.

General Electric

(GE) - Get Report

and

Cisco

(CSCO) - Get Report

also appear in three of Gordon's funds.

The similarity in holdings makes a portfolio already concentrated in tech stocks that much more risky. A reversal in the tech sector could send the entire portfolio reeling. Two funds,

(SLMCX) - Get Report

Seligman Communications and Information and

(ATEBX) - Get Report

Alliance Technology, representing 28% of Gordon's holdings, have more than 75% of their assets in tech stocks. Two others,

(WEINX)

Aim Weingarten and

(PNOBX) - Get Report

Putnam New Opportunities, have about 20% of their holdings in technology. Only

(SOVBX)

John Hancock Sovereign Investors, among Gordon's funds, is relatively tech-free.

Though Gordon is young and says he is willing to tolerate the risk, Roge suggests he diversify the portfolio by adding some small- and mid-cap funds to the group, which is now dominated by large-cap growth funds. He also suggests "something a little more value-oriented." Though growth stocks have dominated the market for several years, "at some point, value is going to outperform growth," asserts Roge.

For a mid-cap holding, Roge likes the $3.7 billion

(LLPFX) - Get Report

Longleaf Partners fund. Value-oriented managers G. Staley Cates and O. Mason Hawkins closed the fund to new investment for three years because they couldn't find enough reasonably priced stocks to buy. The no-load fund reopened last October and requires a $10,000 initial investment. The fund has negligible technology holdings, which should provide some welcome diversification for Gordon's portfolio.

For a small-cap fund, Roge likes

(BSCFX) - Get Report

Baron Small Cap, which struggled in 1998 like all small-cap funds, returning just 2.2%. "If he looks at that, he'll have a tough time buying it," says Roge. "But if he holds it a long time, it will work to his advantage." Indeed, the $470 million no-load fund, managed by Cliff Greenberg, is starting out 1999 with a bang, returning 12.1% year to date.

Roge suggests Gordon could add these funds to his existing portfolio rather than sell any of the funds he currently owns. "They've done very well in the last couple of years. He's already paid the loads, so I would tend to keep them," Roge says.

"It's not a bad portfolio," he adds. "It'll be volatile, but if he can stomach it..."

To hit the million-dollar goal, though, Gordon will need to add money on a consistent basis. How much? We plugged the numbers into a financial calculator and assumed the 11% historic annual growth rate suggested by Roge. Under that scenario, Gordon will have to put away $3,000 a month for 10 1/2 years to hit the million-dollar goal. And that doesn't factor in any taxes on the savings. That's a tall order.

But would he be better off building up his fund holdings or paying down $20,000 in school loans, on which he pays 9% interest?

"That's a tough call," says Roge. "I'd keep it in the market assuming a 10% return. If his goal is $1 million, he's going to have to save more money."

Would you like a

TSC

Portfolio Planner to evaluate your mutual fund portfolio? Send a note to

portfolioplanners@thestreet.com.

We'll need to know what funds you own and roughly what percentage of your portfolio they comprise. We also need to know a little bit about your investing goals.

Each month, we'll select one reader portfolio that we feel is the most interesting or instructive. One of our Portfolio Planners will then offer suggestions for fine-tuning or, if necessary, overhauling it.

Remember, this exercise will be conducted in public, in front of all of our readers. So if you're squeamish about making your financial life public, this probably isn't for you.

The TSC Portfolio Planners series aims to provide general fund and investing information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities.