Something's Happening Here

February 2, 2006

We're please to introduce the MAXadvisor Newsletter, version 2.0.

The MAXadvisor Newsletter is now MAXadvisor Powerfund Portfolios. But don't worry. Besides the new name, a streamlined design, and some new features, not much has changed. We're managing our model portfolios the way we always have - by choosing the best no-load funds in out of favor categories.

The MAXadvisor Powerfund Portfolio's new look is designed to make the MAXadvisor Powerfund Portfolios easier to use. While the navigation you're used to was left largely unchanged, we've improved functionality and put important data points at the tip of your fingers. Here's a quick tour:

I. New Holdings Page.

1. HOLDING BAR: Each individual portfolio holding gets its own holding bar.

2. NAME/TICKER : We include the full name of each fund in our list when possible, but we do abbreviate fund names if space requires. If a fund on our favorites list is either too new or too small to have a ticker symbol (five digits ending in X for an open end fund, three for an exchange traded fund), an N/A will appear in this box.

3. CATEGORY: Funds can be categorized by the valuation and market cap of the stocks they invest in (i.e. small cap growth, large cap value) what sector they invest in (utilities, technology), what country or region they invest in (Japan, Europe), or what type of bonds they invest in (short term, international, municipal).

4. PFR: 'Powerfund Rating. MAXadvisor Powerfund Portfolios look for good funds with strong contrarian appeal. (this is the category outlook definition). The Powefund Rating distills this contrarian appeal and overall quality, down to one number. A fund's Powerfund Rating is a composite of our overall outlook for the fund and the category going forward, as well specifics about the fund (expenses, fund size, manager tenure, hot money, turnover, number of holdings, etc). A fund with a Powerfund Ranking of 1 or 2 means the fund has strong contrarian appeal (in an overlooked category posed for strong growth) as well as has qualities of a good fund in general. Funds with Powerfund Rankings of 4 or 5 are in categories that should underperform the market going forward and/or has several negative attributes specific to the fund.

5. ALLOCATION: The percentage of your total portfolio that you should allocate to this fund. If you are investing $100,000 and the portfolio has a 5% allocation to this fund, you should invest $5,000 into this holding.

6. DATE ADDED: The month and year that a fund was added to the portfolio.

7. 1-MONTH RET.: How much the fund was up (or down, if negative) in percentage terms over the last calendar month, including any dividends. The as of date (at bottom of page) shows the last month considered, so as of 3/06 means the one month return looking back at the end of March, 2006. The figure includes fund expenses but not redemption fees or commissions (if any).

8. 3-MONTH RET : How much the fund was up (or down, if negative) in percentage terms over the last three calendar months, including any dividends. The as of date (at bottom of page) shows the last month considered so as of 3/06 means the three month return looking backwards at the end of March, 2006 or December 31st to March 31, 2006. The figure includes fund expenses but not redemption fees or commissions (if any).

9. 1-YEAR RET. : How much the fund was up (or down, if negative) in percentage terms over the last 12 calendar months, including any dividends. The as of date (at bottom of page) shows the last month considered so as of 3/06 means the 12 month return looking backwards at the end of March, 2006 or from March 31, 2005 to March 31, 2006. The figure includes fund expenses but not redemption fees or commissions (if any).

10. RET. SINCE ADDED: How much the fund was up (or down, if negative) in percentage terms since added to the portfolio, including any dividends. The as of date (at bottom of page) shows the last month considered so as of 3/06 with a date added of 4/02 means the total return looking backwards at the end of March, 2006 or from March 31, 2002 to March 31, 2006. The figure includes fund expenses but not redemption fees or commissions (if any).

11. PURCHASE INFO : The purchase info tab can be clicked to minimize or maximize the purchase info table.

12,13. PHONE/WEBSITE : Looking for additional information about this fund? Call ‘em up! Friendly phone reps will be happy to provide you with a fund’s prospectus, annual report, or application, and to provide up to the minute information on everything from the fund’s NAV to its availability to new investors. Additional information can be found at fund websites. Just add ‘www.’ in front of these web addresses to visit the websites of the funds on our list.

14. FAMILY : The name of the mutual fund company that manages the fund.

15. NTF CODE : Stands for ‘No Transaction fee’. Letters in this column indicate which major fund supermarkets offer this fund for purchase without a transaction fee (meaning you can buy and sell if for free). E=E*TRADE, F=Fidelity, C=Charles Schwab, S=Scottrade, and T=TD Waterhouse.

16. REG/IRA : The minimum investment for both regular (reg) and retirement (IRA) accounts. A “k” means the figure is in thousands, so a fund with a<br />

“2.5k/500” means the fund has a $2,500 minimum for regular accounts, and a $500 minimum for IRA accounts.

17. EXP. RATIO : Expense Ratio. The expense ratio is the percentage of your money the fund uses each year to run the fund and pay the manager. You’ll notice that almost all of the funds in our list have very low expense ratios (for their categories), because the less money you have to pay to the fund company, the more money working for you. This figure does NOT include commissions and redemption fees, if any, charged by the fund and/or the broker you buy the fund through.

18. RED FEE : How much the fund company deducts from your sale (in percent) if you sell within a certain time period (usually expressed in days here) after buying. A “2%/60” short term redemption fee means if you sell within 60 days you will lose 2% of your balance, or $200 on a $10,000 sale. This fee is charged by the fund company, and could be in addition to any short term redemption fees charged by your broker (if you buy the fund through a broker). The fee goes to the fund itself, not the fund company (like a back end load) and is used to punish investors who trade in and out of funds. Most foreign funds, as well as a good deal of smaller cap oriented funds, have short term redemption fees.

19. CAT OUTLOOK : 'Category Outlook' Our proprietary rating for each stock fund category to give investors an idea (or to show) where the best fund investment opportunities lie for the next 1-3 years. 1 Most Attractive - Should outperform the market and 80% of stock fund categories over the next 1 to 3 years. 2 Interesting - Should outperform the market and 60% of stock fund categories over the next 1 to 3 years. 3 Neutral - Should match the markets return and perform in the middle of other stock fund categories. 4 Weak - Should underperform the market and 60% of stock fund categories. 5 Least Attractive - Should under-perform the market and 80% of stock fund categories over the next 1 to 3 years. Note that the Powerfund rating for an individual fund is a combination of a funds category outlook and all the other fund-specific data we look at.

20. RISK LEVEL : The risk level of mutual fund categories compared to each other - expressed here as either ‘Low’, ‘Moderate’ or ‘High’. High risk fund categories usually have the potential for the biggest gains, but also the steepest losses. Low risk fund categories will generally be less volatile. Note that most bond funds are “Low” risk because they are low risk compared to just about any stock fund. Be aware that a high yield (junk bond) fund or an emerging market bond fund is a good deal riskier than say, a short term investment grade bond fund, or a bond index fund.

21. PURCHASE NOTE: If there is any additional information that you need to know having to do with the purchase or sale of a particular holding, you'll find it here.

22. VIEW ALTERNATES : Sometimes a holding is either closed to new investors or may not be available to you at your broker, or in your 401(k), or has a minimum that is too high. Click the View Alternates tab to see alternative choices for that holding.

23. IMPORTANT NOTES : Here you'll find important information about a holding, such as purchase restrictions or important news. Be aware that this box will only appear if there is important information about a holding available.

II. Portfolio About Page

New on this page is improved data to help you decide what portfolio is right for you: 1) a Value of $10k Invested graph which shows the value of $10,000 invested in each portfolio since inception, and 2) a holding performance table, that lists the performance of each fund in the portfolio (past and present).

III. Portfolio Homepage

New on the model portfolio homepage is a table that compares performance of each portfolio for the best and worst three month and one year time periods – useful for gauging the risk and reward tradeoff.

IV. Combined Commentary/Trades

We've combined what used to be a separate Trade and Commentary page for each portfolio into a single page. Trades are easy to spot because they get a red headline bar. Monthly Commentary headline bars are blue.

<img src="../images/newsletter/recchanges.gif" / align="left" />V. Recent Changes

The recent updates alert box has found a permanent home at the top of the left hand sidebar on each and every newsletter page. Trade alert updates will appear in red.

But wait, there’s more!

In addition, we’ve revamped the website to make it easier to follow trades. From now on we’ll alert you to pending trades two weeks before the end of a month were trades are scheduled. There will be clear “Before” and “After” tables to highlight the changes to the portfolios.

Please send us your comments / questions (email) about the new look!

Something's Happening Here

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