You live by the stop, you die by the stop.  The sector and country models were stopped out on July 7, just before the July low and strong, earnings related rebound.  No excuses here, but this market has been very volatile, which is the bane of stringent risk management strategies like this one.  On many occasions the stops have worked as intended to keep us out of deep trouble.  Missing some on the upside is a small price to pay when the stops work as intended in other months - to save the portfolio from steep losses.  The currency model stepped up to mitigate the losses elsewhere, which is why this low correlation piece was added.  It is a nice stabilizer for this primarily equity based portfolio.  I have no doubt that this model will really close the gap on the market indices as we finish 2009. 

Sector Model - July Return  -5.48%

For August- 5 slots - 20% each    PXN, IGW, IXG, IBB, IAK


Country Model - July Return   -6.14%

For August- 5 Slots - 20% each        EWY,  EPP, EWP, EWD, EWS


Currency Model - July Return    +4.06%

For August - 3 slots - 33.3% each       FXE, FXS, FXA - (No Change)


Paired Index Model - July Return   +0.17%

For August- 2 slots - 50% each   -  QQQQ, DIA



Putting It All Together - July Return -2.01%

This return was produced by combining the models as follows:

30% Sector, 30% Paired Index, 20% Country, and 20% Currency.



2009 Overall Return: +2.76%


2009 Returns for Major Indices:

Dow                        +4.50%

S&P 500                  +9.33%

Nasdaq Composite  +25.46%


By combining all models for August, the positions will be:

6% IAK

6% IGW
 
6% IXG
 
6% IBB
 
6% PXN

4% EWP
 
4% EWY

4%  EPP

4% EWD
 
4% EWS

6.66% FXE

6.66% FXS

6.67% FXA

15% QQQQ

15% DIA