AlphaProfit Sector Investors' Newsletter: Repositioning Schedule and March Indicator Update

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AlphaProfit Newsletter: Repositioning Schedule and March Indicator Update
March 3, 2008

Dear Valued Subscriber,

The Core and Focus model portfolios will be repositioned for the evolving market environment after the markets close on Monday, March 31. To help you closely track the model portfolios, we will publish the Repositioning Alert by 12:00 p.m. Central Time on March 31 in the Subscriber Login area. We will notify you via e-mail when the Repositioning Alert is published on the web site.

Market Developments

After maintaining a positive bias for most of February, the major U. S. stock indexes ended the month with a loss. The upward movement in stock prices stemmed largely from expectations of a relatively large cut in short-term interest rates in March. Corporate earnings reports outside of the financial sector were generally sound and provided support.

Economic data however caused investors angst. Stagflation entered the realm of possibilities. Inflation indicators ticked up and commodity prices continued to surge as the U. S. dollar tanked to fresh lows. Meanwhile, U. S. growth indicators suggested sluggishness in the economy.

Downgrading the AlphaProfit Sector Portfolio Indicator to 'Wait'.

While valuation metrics for stocks remain attractive, we see some near-term risks. The recent rally in equity prices is pinned on hopes that the Federal Reserve will cut short-term interest rates by as much as 0.75% after the central bank's Open Market Committee meets on March 18. We believe the recent up-tick in commodity prices can limit the Federal Reserve's response to perk up growth and cause equity prices to sell off. Additionally, efforts to shore up capital for leading bond insurers like Ambac and MBIA appear to be running on a slow track. This coupled with the possibility of rising losses on loans made by financial institutions poses additional risks for equity prices.

We downgrade the AlphaProfit Sector Portfolio Indicator to 'Wait' before repositioning the model portfolios. The current model portfolio compositions as well as exchange traded fund (ETF) and mutual fund recommendations are available in the Subscriber Login area of the web site.

Model Portfolio Performance

Model portfolio returns as of February 29, 2008 are as follows:

	Feb. 2008	YTD*	1 Year	3 Year	4 Year	Sep. 2003 Inception
AlphaProfit Focus™ Model Portfolio	-2.3%	-9.8%	-6.4%	37.4%	49.3%	102.7%
AlphaProfit Core™ Model Portfolio	-1.8%	-10.6%	-2.6%	35.1%	34.2%	69.3%
DJ Wilshire 5000 Total Market Index	-3.0%	-8.9%	-4.1%	19.4%	28.9%	50.2%

^* YTD refers to the December 31, 2007 to February 29, 2008 period.

Factors driving performance of recommended sectors and industry groups and their investment outlook will be discussed in the March Report due for publication on the 12th.

We welcome your comments.

Best regards,
Sam Subramanian
AlphaProfit Investments, LLC
Ideas. Insights. Results.
http://www.alphaprofit.com

Notes: The AlphaProfit Sector Investors' Newsletter™ is for information purposes only. AlphaProfit Investments, LLC is not soliciting any subscriber to buy or sell any security. Nothing herein should be construed as an offer to buy or sell securities or to give individual advice on investing. Before buying or selling any mutual fund, exchange-traded fund, security, or investment, read the prospectus carefully. For securities held in brokerage accounts, read the broker's specific terms and conditions which apply to trading of the securities. AlphaProfit Investments, LLC cannot and does not give any assurance that the present or future model portfolio changes will be profitable. Past performance is not a guarantee for future results. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. AlphaProfit Investments, LLC is not responsible for any errors or omissions. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from any of the mutual fund companies, brokers or entities connected with the exchange-traded funds mentioned in the newsletter. Please review our Terms and Conditions of Use and Subscriber Agreement which is available on our website at www.alphaprofit.com; they govern your relationship with AlphaProfit Investments, LLC, including, but not by way of limitation, use of this newsletter. No part of the AlphaProfit Information may be reproduced or re-transmitted in any manner without written permission of AlphaProfit Investments, LLC.