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Wednesday, August 30, 2006

Model Portfolio Performance

My long-term model continues to strengthen and all eight short-term technical indicators improved over night. I’m getting the feeling that the markets are coiling, like a spring, ready to explode upwards on the right information. Perhaps its wishful thinking, perhaps not. We’ll just have to wait and see.

I still like the S&P 100 (OEF) and the NYSE 100 (NYC) as the major markets that investors should look to for beta. Interestingly enough, the S&P 500 (IVV) shifted to “neutral” status overnight, but just barely. I wouldn’t read too much into that however, at least not yet.

Large Cap Value (JKF) remains the sole style-box investment with a recommended “buy” status. Small Cap Core (JKJ) investments have done well over the last week, easily out-performing the other style-box derivatives. It’s still a “neutral” recommended investment, but I wouldn’t be surprised to see an upgrade to “buy” status if the current trend continues.

There are now nine “buy” rated and two “sell” rated sectors. Real Estate (IYR), Semiconductors (IGW), Utilities (IDU), Technology (IYW), Software (IGV), Healthcare (IYH), Telecommunication (IYZ), Non-Cyclical (IYK), and Networking (IGN) sectors are all favorable at the moment. Energy (IYE) and Natural Resources (IGE) continue to traverse the extremes, illustrating the recent volatility of those two sectors. I’ve said it several times, but energy investments should be within the long-term portion of your portfolio for now and not the actively-managed component. It’s just too hard to stay ahead of the game.

I’d like to point out the performance table I added in the right hand column. Included are rolling one-year and from-inception values for the five model portfolios we run and provide to our subscribers. These portfolios select the top alpha-generating investments from their respective categories and are designed for those investors, either private or professional, who want the benefits of portable alpha without having to actually select the investments. I apologize for breaking the unwritten “blog code” by promoting my business, but I wanted everyone to understand what those atypically good numbers represent. I’m obviously happy to discuss them, so send me an email if you have any questions.

Have a great day!

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