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June 2008 Performance review

The strength we saw in most stock indexes in May turned to weakness in June. Before all was said and done the Dow was down around 10% for the month, with other broad indexes following suit. The Nasdaq dropped 9.11% in June, the Russell 2000 small cap index 7.7%, and the S&P 500 8.43%. With July’s continued carnage we’re now in bear market territory – a 20% drop from a market peak – in all of the big indexes. None of our model portfolios was down more than 5% in June.

Time To Buy! But What? And Why?

In our commentary last month we noted how, over the last year, fund investors have been getting out of stock funds after the market slipped, then buying in after the market rose – the classic buy high/sell low cycle. A successful fund portfolio does not this behavior make, and doing the opposite is pretty much what the Powerfund Portfolios are all about. We are going to use June’s sharp pullback in stocks to increase our stock allocations and risk levels across the board.

June 2008 Trade Alert!

We're making trades in the Conservative portfolio. You can view the trade specifics in the before and after (pre- and post-trade) tabs for the portfolio.