After five of the prior seven weeks with 3.5% or more of growth per week, this past week saw the Value Investment Fund with a disappointing reduction in value of 2.6%. One of the drawbacks of value investing is that, at times, the investor feels like their portfolio just isn’t exciting. But at the end of the day, value investing isn’t about excitement, it’s about generating good overall return over the long haul. There isn’t anything exciting about 30 to 40% returns per year. It pales when you hear stories of some investors that earned 200% or more on their investments. The reality is that the 30 to 40% returns per year come with minimal risk; whereas others have extreme risk and sometimes they are rewarded with outstanding returns. You hear about those outstanding returns, you never hear about the huge losses those risk takers absorb.
The fund is still well ahead of schedule and will surpass 48% return for fiscal year 2021. It is currently at 40.5% through the first 21 weeks. All of the respective investments on are on hold waiting for them to work their way to the target sales price. As they head towards those targets, there are going to be weeks like this past week whereby the entire market was down a half percent. In turn, this does impact value investment funds. Certain industries had greater setbacks and of course real estate investment trusts were one of those industries. During this past week, the REITs pool of investments experienced a 4% downturn. Still, REITs are leading the way for the fund with unrealized gains of $21,470 on a $70,000 investment basis over the 21 week period. An investor should be thrilled with results like that; but it just is disheartening when there is a minor setback. Adherence to the fourth principle of value investing, patience, will pay off.