AlphaProfit Sector Investors' Newsletter: May Indicator Update

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AlphaProfit Newsletter: May Indicator Update
May 1, 2008

Dear Valued Subscriber,

The AlphaProfit model portfolio returns as of April 30, 2008 are as follows:

	Apr. 2008	QTD*	1 Year	3 Year	4 Year	Sep. 2003 Inception
AlphaProfit Focus™ Model Portfolio	7.8%	7.8%	-3.4%	52.5%	81.1%	116.2%
AlphaProfit Core™ Model Portfolio	7.5%	7.5%	-0.5%	49.1%	59.8%	80.3%
DJ Wilshire 5000 Total Market Index	5.1%	5.1%	-4.7%	29.7%	38.7%	56.6%

^* QTD refers to the March 31, 2008 to April 30, 2008 period.

Equity prices bounced back from two straight quarters of losses and started the second quarter on a positive note. While some high profile earnings misses led to jitters at the start of the first quarter reporting season, a slew of better-than-expected reports soon gave investors hope that the worst may be over and caused equity prices to rally. The beleaguered U. S. dollar rallied against the euro and yen for a change.

Meanwhile, the financial sector continued to serve bad news. Merrill Lynch wrote off several billion of debt. Citigroup, National City, and Washington Mutual raised equity capital to mend their balance sheets.

Maintaining the AlphaProfit Sector Portfolio Indicator at 'Buy'.

While headlines from the housing and financial services industries remain negative, things do not appear to be getting worse. First quarter earnings reported to date suggest that the damage from the sub-prime mess has been relatively contained and not spilled beyond financial services and consumer discretionary sectors.

If the worst for the U. S. economy is indeed over, the economic backdrop for owning equities in general will likely improve in the coming months. Volatility in specific sectors and groups is however likely to increase in the near-term as markets adjust to this reality. Most notably, the appeal of commodities as an inflation hedge could wear off if the Federal Reserve holds the line on interest rates and recent strength in the U. S. dollar endures. This in turn can cause commodity-oriented equities to give back some gains temporarily as investors rotate into other groups.

We are constructive in our intermediate-term outlook for equity prices and rate the AlphaProfit Sector Portfolio Indicator 'Buy'.

Presently, we are not making any changes to the sector and industry recommendations or the model portfolios. The 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.

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.