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Sector Rotation update

While our current Sector Rotation holding had a rather poor month of January (losing 9.7%), it remains within the top quartile, so it will continue to be held for February.

It's worth noting that this fund's cash allocation has now risen to over half of the fund's assets (as of 12/31/08). That's not all bad in a falling market, but comes as a bit of a surprise, perhaps, to those who understandably expect that their money is invested in small-cap financial stocks.

Given this cash buildup, and the fact that the fund slipped from the top of the rankings to the middle of the top quartile this past month, if I were a new investor contemplating buying into SR for the first time, I'd likely wait to do so until a new recommendation was offered (or until the current fund climbs back up the rankings a bit). Note carefully, this doesn't mean I'd sell an existing position in the fund. This is simply for new entrants to the SR strategy who are wondering if they should buy the current recommendation or wait for a new one (a common question). In this particular case, I'd be inclined to wait a month and see what the March rankings look like.

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