Fidelity Investments® has the right to change the fees and fund exchange costs at any time. Although we seek to keep information content current, the information is provided with no guarantees or warranties. Newsletter subscribers should read each fund's prospectus to understand the fees associated with the investments.

4.1) Are the Fidelity mutual funds included in the model portfolios no-load or load funds?

4.2) Do I need to have an account with Fidelity Investments to invest in the mutual funds discussed in the AlphaProfit Sector Investors' Newsletter?

4.3) Does Fidelity Investments® charge a short-term redemption fee on Fidelity Select fund investments?

About Investment Newsletter

5.1) How often is the AlphaProfit Sector Investors' Newsletter™ published?

5.2) How is the AlphaProfit Sector Investors' Newsletter distributed?

5.3) I am using the correct user name and password but am unable to access the subscriber login area. What do I do?

Investment Newsletter Usage

6.1) Is it risky to invest in sector funds and hold them for several months?

6.2) What is the difference between AlphaProfit Core Model Portfolio and AlphaProfit Focus Model Portfolio?

6.3) Can I invest my Fidelity IRA, Fidelity SEP-IRA, Fidelity Keogh, Fidelity 401k, Fidelity 403b, or Section 457 plan assets in the funds included in the model portfolios?

6.4) Can I buy the model portfolio mutual funds on margin?

6.5) How should I use the AlphaProfit Focus and Core Model Portfolios? What portion of my assets should I invest to track the AlphaProfit Focus and Core model portfolios?

Getting Started

7.1) What is the minimum initial investment needed for tracking the model portfolios?

7.2) As a new investment newsletter subscriber, should I buy Fidelity mutual funds included in the model portfolios right away or wait until the AlphaProfit model portfolios are repositioned next?

7.3) I want to add cash to my investment account. How should I go about building my investment account?

Subscriber Tools

8.1) I add to my investment portfolio on a monthly basis. How should I use the AlphaProfit Sector Portfolio Indicator?

8.2) Does AlphaProfit suggest a specific percent of decline to guide the use of the 'Buy on Dips' reading?

8.3) ) Should I try to time the purchase of each sector or industry group fund when the AlphaProfit Sector Portfolio Indicator reads Buy on Dips?

8.4) Should I sell the fund if the Favored Buy rating on this fund is removed?

8.5) Why doesn't the composition of the AlphaProfit model portfolios change based on changes for the AlphaProfit Sector Portfolio Indicator reading or 'Favored Buy' Rating?

About AlphaProfit Investments

1.1) What is the mission of AlphaProfit Investments™, LLC and what is its relationship with Fidelity Investments?

AlphaProfit Investments is an independent investment research firm that is dedicated to providing investment ideas and insights to enable investors earn superior long-term returns on an absolute as well as risk-adjusted basis. AlphaProfit Investments publishes the AlphaProfit Sector Investors' Newsletter. Dr. Sam Subramanian, PhD, MBA is the managing principal and chief investment officer of AlphaProfit Investments. AlphaProfit Investments is neither associated with nor receives any compensation from Fidelity Investments.

1.2) Do the staff members of AlphaProfit Investments, LLC invest their assets to track the model portfolios outlined in the AlphaProfit Sector Investors' Newsletter?

Yes, we eat our own cooking! The staff members of AlphaProfit Investments, LLC do invest their assets to track the Fidelity mutual fund model portfolios outlined in the investment newsletter. Sam Subramanian has been using the ValuM Investment Process for selecting Fidelity Select funds since 1996.

1.3) Does AlphaProfit Investments offer managed account services? Can AlphaProfit send the prospectus of Fidelity mutual funds?

AlphaProfit Investments currently does not offer managed account services. AlphaProfit is an independent research firm and is not affiliated with Fidelity Investments. You may obtain the prospectus of Fidelity mutual funds by contacting Fidelity at (800)-544-6666 or by visiting Fidelity's web site http://www.fidelity.com.

Model Portfolios

2.1) Is the performance of the AlphaProfit model portfolios being tracked by an independent third-party?

Yes. The performance of the AlphaProfit Newsletter and model portfolios is tracked by Hulbert Financial Digest since January 2004. The Newsletter and its model portfolios have ranked #1 several times.

2.2) Is the performance of the model portfolios prior to the start of the newsletter, the result of some form of back-testing?

The AlphaProfit Sector Investors' Newsletter was started on September 30, 2003. The performance of the model portfolios prior to the start of the newsletter is the result of systematically selecting Fidelity Select funds using AlphaProfit's proprietary ValuM Investment Process. Sam Subramanian has been using the ValuM Investment Process for selecting Fidelity Select funds since 1996 and has invested his personal assets in several of the holdings outlined in the model portfolios since that time.

2.3) Do AlphaProfit model portfolios market-time by switching between cash and equity mutual fund investments?

AlphaProfit model portfolios do not market-time. The portfolios are usually fully invested in equity mutual funds. If the market environment results in fewer than optimal number of Fidelity sector funds with high expected sector-specific return, a portion of the AlphaProfit Core model portfolio may be invested in the Fidelity Spartan 500 Index Fund or the Fidelity Spartan Total Market Index Fund. The Fidelity Spartan 500 Index Fund and the Fidelity Spartan Total Market Index Fund seek to track the performance of the S&P 500 index and Dow Jones Wilshire 5000 indexes, respectively.

2.4) How often does AlphaProfit reposition its model portfolios using Fidelity mutual funds?

AlphaProfit Investments seeks to maximize long-term, after-tax returns. Model portfolios are repositioned only when the expected rewards from the repositioning decisions potentially outweigh the tax consequences. The AlphaProfit model portfolios are usually repositioned every 6 months.

2.5) Why doesn't AlphaProfit rotate in and out of sector funds more frequently?

Our objective is to keep the model portfolios fully invested in sector or index mutual funds at all times. Our exchange decisions seek to optimize a confluence of factors including providing adequate time for our investment thesis to play out, capitalizing on opportunities in sector funds currently not included in the model portfolios, and maintaining a level of tax efficiency.

2.6) What has been the historical drawdown on the AlphaProfit model portfolios?

Historical six month returns for the AlphaProfit model portfolios are available from the historical holdings page. The model portfolios are fully invested in equity mutual funds at all times and do not use margin. Additionally, we typically include positions in our model portfolios for at least six months. We therefore prefer to use six month returns to measure the performance of the model portfolios. We use the Sharpe ratio to measure their risk-adjusted performance. AlphaProfit Report documents available in Newsletter Archives typically include the prior month's returns on the model portfolios.

Selection of Recommended Sectors and Preferred Investments

3.1) How does AlphaProfit select recommended sectors and industry groups?

AlphaProfit uses the proprietary ValuM™ Investment Process to evaluate sectors and industry groups based on their momentum, valuation, and news quality. This process seeks three characteristics: Relative strength vs. the S&P 500 index, attractive valuation from a historical perspective, and favorable fundamentals or catalysts. The recommended sectors and industry groups rank favorably on the ValuM Investment Process metrics.

3.2) How does AlphaProfit select recommended mutual funds and ETFs?

In recommending mutual funds and ETFs to play the investment thesis for the sector or industry group, we ascertain if the investment objective of the product is consistent with the definition of the recommended sector or industry group.

3.3) How does AlphaProfit select preferred mutual funds and ETFs?

We select the preferred mutual funds and ETFs from the recommended mutual funds and ETFs. We typically include Fidelity Select Funds and Fidelity Index Funds in the model portfolios and identify them as preferred investments. We consider factors like historical performance versus sector or industry benchmarks, expense ratios, nature of holdings, and liquidity in identifying the preferred ETF or ETFs combination.

Investing in Fidelity Mutual Funds

4.1) Are the Fidelity mutual funds included in the model portfolios no-load or load funds?

All Fidelity mutual funds included in the model portfolios such as Fidelity Select Portfolio Funds, the Fidelity Spartan 500 Index Fund, and the Fidelity Spartan Total Market Index Fund are no-load funds.

4.2) Do I need to have an account with Fidelity Investments to invest in the mutual funds discussed in the AlphaProfit Sector Investors' Newsletter?

No, you do not need to have an account with Fidelity Investments to invest in the mutual funds discussed in the newsletter. You may trade these mutual funds through brokers offering trading of such funds. There may however be a cost advantage if you have an account with Fidelity. Fidelity allows investors with Fidelity accounts to buy, sell, or exchange Fidelity mutual funds without paying a commission when the trades are placed through Fidelity's web site. Other brokers may charge a commission for buying, selling, or exchanging Fidelity mutual funds.

4.3) Does Fidelity Investments® charge a short-term redemption fee on Fidelity Select fund investments?

Investments in Fidelity Select funds need to be held for at least 30 days to avoid the 0.75% short-term redemption fee. The AlphaProfit model portfolios are generally repositioned once every 6 months and the short-term redemption fee is therefore less of an issue. Additionally, to help subscribers avoid the short-term redemption fee, we consider the timing of upcoming model portfolio repositioning changes in assigning the AlphaProfit Sector Portfolio Indicator reading.

About Investment Newsletter

5.1) How often is the AlphaProfit Sector Investors' Newsletter™ published?

The AlphaProfit Sector Investors' Newsletter comprises of four parts: AlphaProfit Report, Indicator Update, Repositioning Alert, and AlphaProfit Bulletin. The AlphaProfit Report is published on the 12th day of each month. The Indicator Update is published on the first trading day of each month. The Repositioning Alert that describes the model portfolio repositioning changes is published before market close on the last trading day of June and December. The AlphaProfit Bulletin is published on an as-needed basis either in anticipation of or following major sector moves or market events.

5.2) How is the AlphaProfit Sector Investors' Newsletter distributed?

The Indicator Update and Bulletin parts of the investment newsletter are distributed as HTML e-mails. The AlphaProfit Report and Repositioning Alert documents are published in Portable Document Format (PDF).

All of the newsletter documents are available on line in the Subscriber Login area. You need to have the Adobe Acrobat Reader software installed on your computer to read documents distributed in the PDF format. The Adobe Reader is available for download free of charge at http://www.adobe.com. The Acrobat PDF file format is supported by Windows and Macintosh platforms.

Subscribers also have the option of receiving paper copies of AlphaProfit Reports by First-Class mail for a nominal charge. The paper copies are in black and white.

If you do not have Adobe Acrobat Reader^®, click on the Acrobat icon to download the latest version.

5.3) I am using the correct user name and password but am unable to access the subscriber login area. What do I do?

If you have difficulty accessing the subscriber login area, please contact us and we will try to help.

You may also want to note the following if you are using Internet Explorer to access the Internet. The selection of 'Anonymous logon' as the User Authentication* option prevents Internet Explorer from requesting the User Name and Password when the Login button is clicked. (Internet Explorer instead directs you to a page that reads 'You need to be an AlphaProfit Sector Investors' Newsletter subscriber to view the recent issues.')

If 'Anonymous logon' is selected as the User Authentication option, please deselect it. Instead select any of the other User Authentication options such as 'Anonymous logon only in Intranet zone', 'Anonymous logon with current user name and password' or 'Prompt for user name and password'. Save this Internet Explorer setting and close all Internet Explorer sessions.

After reopening Internet Explorer, access http://www.alphaprofit.com and click on the Login button under 'Login for Newsletter'. The User Name and Password can be entered in the window that opens.

* To view the User Authentication option selected, open Internet Explorer. Click on Tools and then click on Internet Options. Select the Security tab. Click on the 'Custom Level' button. Scroll down to the 'User Authentication>Logon' section.

Investment Newsletter Usage

6.1) Is it risky to invest in sector funds and hold them for several months?

Like individual stocks, sector funds can be volatile investments particularly when viewed in isolation over short time frames. Volatility however reduces when several sector funds are grouped together.

Rather than take sector funds in isolation, we take a portfolio approach to investing in them. We offer two model portfolios: AlphaProfit Core Portfolio and AlphaProfit Focus Portfolio. We tend to think of the investments that track an AlphaProfit model portfolio as a customized, fully-invested mutual fund created using a group of sector funds. We endeavor to add value by selecting sectors with prospects for outperforming broad averages like the Dow Jones Wilshire 5000 Total Market Index.

6.2) What is the difference between AlphaProfit Core Model Portfolio and AlphaProfit Focus Model Portfolio?

The AlphaProfit Core Model Portfolio is a diversified portfolio constructed using Fidelity sector funds and Fidelity mutual funds that may be suitable for investors seeking long-term capital appreciation in retirement as well as regular accounts. Typically, 7 or 8 Fidelity Select funds are included in the AlphaProfit Core Portfolio.

The AlphaProfit Focus Model Portfolio is a concentrated portfolio of Fidelity sector funds that may be suited for investors seeking aggressive growth in retirement as well as regular accounts. On average 2 Fidelity Select funds are included in the AlphaProfit Focus Portfolio. Volatility and portfolio turnover of the Focus Portfolio are higher than those of the Core Portfolio. The concentrated composition may expose the Focus portfolio to higher degree of risk.

6.3) Can I invest my Fidelity IRA, Fidelity SEP-IRA, Fidelity Keogh, Fidelity 401k, Fidelity 403b, or Section 457 plan assets in the funds included in the model portfolios

Yes, the mutual funds used in the AlphaProfit Core and Focus portfolios are available for Fidelity IRA, Fidelity SEP-IRA or Fidelity Keogh plan investors. The IRA may be a Rollover IRA, Roth IRA, or self-directed IRA. Assets in a Fidelity 401k, Fidelity 403b, or Section 457 plans may also be invested in the Fidelity Select funds if such employer-sponsored plan includes this option. Assets in Fidelity 401k plans may be conveniently managed using Fidelity NetBenefits.

6.4) Can I buy the model portfolio mutual funds on margin?

Yes, the mutual funds used in the AlphaProfit model portfolios can be purchased on margin if the account type allows such purchases.

6.5) How should I use the AlphaProfit Focus and Core Model Portfolios? What portion of my assets should I invest to track the AlphaProfit Focus and Core model portfolios?

A sound mutual fund investing strategy takes into account both risk and return potential of different types of mutual funds. The choice of the model portfolio you may wish to track with your assets depends on your financial situation and goals. You should consider your personal circumstances including factors such as investment objective, risk tolerance, and investment time horizon in allocating capital to track the model portfolios. AlphaProfit currently does not offer individual investment advice on choice of, and asset allocation to the model portfolios.

Getting Started

7.1) What is the minimum initial investment needed for tracking the model portfolios?

Generally speaking, the minimum initial investment required for tracking the AlphaProfit Focus model portfolio is $5,000 to $10,000 for regular as well retirement accounts such as Roth IRA, Rollover IRA, or self directed IRA. The minimum initial investment required for tracking the AlphaProfit Focus portfolio is $1,000 to $2,000 for SEP-IRA or Keogh accounts.

The minimum initial investment required for tracking the AlphaProfit Core model portfolio depends on the composition of this model portfolio. Generally speaking, the minimum initial investment required for tracking the AlphaProfit Core model portfolio is around $25,000 in regular as well retirement accounts such as Roth IRA, Rollover IRA, or self directed IRA. The minimum initial investment required for tracking the AlphaProfit Core model portfolio is around $5,000 in SEP-IRA or Keogh accounts.

7.2) As a new investment newsletter subscriber, should I buy Fidelity mutual funds included in the model portfolios right away or wait until the AlphaProfit model portfolios are repositioned next?

You may get started with an investment account to track the AlphaProfit model portfolios when the AlphaProfit Sector Portfolio Indicator™ reads 'Buy' or 'Buy on Dips'. You may choose to defer investing your cash to a later date if the indicator reads 'Wait'.

You may choose to invest your cash in the AlphaProfit Model Portfolio mutual funds in the same proportion as in the model portfolio. Additional information on portfolio development is available in the Getting Started page.

7.3) I want to add cash to my investment account. How should I go about building my investment account?

You may consider one of three approaches to add cash to your investment account depending on your personal situation and preference.

All-at-once: You may add the entire cash to your investment account in one go, if the AlphaProfit Sector Indicator reading is either 'Buy' or 'Buy on Dips'.

Periodic additions: You may add cash to your investment account every 6 months before the repositioning of the AlphaProfit Model Portfolios.

Dollar-cost-average: You may spread your additional cash investment over a period of time by investing when the AlphaProfit Sector Portfolio indicator reads 'Buy' or 'Buy on Dips'.

In all of the three cases, you may invest your cash in the AlphaProfit Model Portfolio mutual funds in the same proportion as in the model portfolio you are tracking. The composition of the model portfolios is updated on the first trading day of each month and is available in the Subscriber Login area of the web site.

Additional information on portfolio development is available in the Getting Started page.

Subscriber Tools

8.1) I add to my investment portfolio on a monthly basis. How should I use the AlphaProfit Sector Portfolio Indicator?

If you are investing through payroll deduction or automatic investment plans such as Fidelity's Automatic Account Builder, you may add to your investment portfolio whenever the AlphaProfit Sector Portfolio Indicator reads 'Buy' or 'Buy on Dips'. You may defer your investment when the AlphaProfit Sector Portfolio Indicator reads 'Wait'. To keep matters simple, you may choose to invest cash in the model portfolio Fidelity mutual funds in the same proportion as at the last repositioning.

Alternatively, you may park your savings each month in a money market fund like Fidelity Cash Reserves and invest the cash to track the AlphaProfit Model Portfolios when they are repositioned.

8.2) Does AlphaProfit suggest a specific percent of decline to guide the use of the 'Buy on Dips' reading?

AlphaProfit does not target a specific level of decline since such a target may not materialize in each and every instance and one may miss the buying opportunity. At AlphaProfit, we seek to keep the model portfolios fully invested in sectors that are likely to perform better than the broad market averages over long-periods of time. As such, the 'cost' of missing a buying opportunity may be larger than that associated with index mutual funds.

Simply said, subscribers tracking the model portfolios may buy the basket of Fidelity mutual funds included in the model portfolios during periods when the market is weak rather than during periods when the market is strong.

8.3) Should I try to time the purchase of each sector or industry group fund when the AlphaProfit Sector Portfolio Indicator reads Buy on Dips?

The performance of individual sector and industry group funds may of course be different from that of the overall market. Subscribers may in their own discretion put in the effort to time the purchase of each sector or industry group fund to get a better price.

8.4) Should I sell the fund if the Favored Buy rating on this fund is removed?

Yes. You may sell the investment when we remove the 'Favored Buy' rating. We remove the Favored Buy rating on Fidelity Select funds or ETFs when the investment generally becomes as attractive as other preferred funds or ETFs.

As explained in the answer to Question 8.5, Subscribers seeking to track the AlphaProfit model portfolios with their investment accounts do not need to adjust their investment accounts based on the 'Favored Buy rating'.

8.5) Why doesn't the composition of the AlphaProfit model portfolios change based on changes for the AlphaProfit Sector Portfolio Indicator reading or 'Favored Buy' Rating?

The AlphaProfit Focus and Core model portfolios are always fully invested and no new cash gets added to these model portfolios. The composition of the model portfolios does not change in response to AlphaProfit Sector Portfolio Indicator readings or Favored Buy ratings. The composition of the model portfolios changes only when the model portfolios are repositioned.

If your objective is to track the model portfolios, you do not need to adjust your portfolios based on the Favored Buy ratings, we assign. We provide Favored Buy ratings on individual funds or ETFs for subscribers seeking short-term trading recommendations.

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