AlphaProfit Newsletter: Repositioning Schedule and September Indicator Update

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AlphaProfit Newsletter: Repositioning Schedule and September Indicator Update
September 2, 2008

Dear Valued Subscriber,

The Core and Focus model portfolios will be repositioned for the evolving market environment after the markets close on Tuesday, September 30. To help you closely track the model portfolios, we will publish the Repositioning Alert by 12:00 p.m. Central Time on September 30 in the Subscriber Login area. We will notify you via e-mail when the Repositioning Alert is published on the web site.

Market Developments

Supported by a stronger U. S. dollar, major U. S. stock indexes gained in August. Economic data suggestive of strength in the U. S. and sluggishness in Europe supported the dollar. A rising U. S. dollar in turn provided the backdrop for oil and other dollar-denominated commodities to continue their decline from July. The resulting decline in gasoline prices took some pressure off consumers. Investors focused more on these positives and brushed aside negative news from financial institutions like Fannie Mae, Freddie Mac, and Lehman Brothers.

Maintaining the AlphaProfit Sector Portfolio Indicator at 'Buy'.

Benefits from rising exports and the one-time stimulus package helped U. S. gross domestic product expand at a relatively strong 3.3% annualized rate during the second quarter. With overseas economies starting to cool, the pace of exports is likely to slow going forward. Driven largely by weakness in the financial and consumer discretionary sectors, the recent trend of negative year-over-year earnings comparisons for the S&P 500 is likely to extend to the third quarter. With the Federal Reserve focused on inflation, reduction in short-term interest rates is unlikely to be forthcoming in the near-term.

Against the above backdrop, we are cautious in our outlook for the U. S. equity market. Oil & gas shares however trade at pessimistic expectations versus their earnings potential and provide AlphaProfit model portfolios the possibility of faring better than the broad market in the period ahead. We rate the AlphaProfit Sector Portfolio Indicator 'Buy' based on this consideration. We also encourage subscribers to maintain adequate cash reserves and have appropriate diversification in their overall portfolio.

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 August 31, 2008 are as follows:

	Aug. 2008	3Q2008*	YTD*	1 Year	3 Year	4 Year	Sep. 2003 Inception
AlphaProfit Focus™ Model Portfolio	1.4%	-7.5%	-9.6%	-8.3%	16.1%	66.3%	103.3%
AlphaProfit Core™ Model Portfolio	1.5%	-2.5%	-9.9%	-5.5%	21.0%	58.0%	70.7%
DJ Wilshire 5000 Total Market Index	1.6%	0.7%	-10.3%	-9.9%	13.2%	31.2%	47.9%

^* 3Q2008 refers to the Jun. 30, 2008 to Aug. 31, 2008 period while YTD refers to the Dec. 31, 2007 to Aug. 31, 2008 period.

Factors driving performance of recommended sectors and industry groups and their investment outlook will be discussed in the September 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.