Trade Alert - September 3, 2006

Recommended Portfolio Allocation Changes- This Week

Market Rally Triggers Bullish Allocations

In the past several weeks, the market has managed to claw itself out of quite a hole. As of last Friday's close, the market had improved enough to trigger a bullish increase in stock market allocations in most of our model portfolios. Note that while the models are all now technically fully invested, they remain on a defensive volatility setting. The models are still reading a significant degree of deterioration in the market's underlying technical condition.

The effect of the reduced volatility setting is to enforce a bias in the models' allocations to favor Large Cap stocks which are the least volatile sector. Even if the Small Cap, Mid Cap or OTC sectors improve enough in relative strength versus Large Caps to warrant an allocation, the reduced volatility setting will minimize the size of any allocations in these more volatile sectors.

Changes in the Growth Portfolio: This model is moving to a fully invested, bullish posture by increasing its previous 2/3rds allocation in LargeCap stocks to 100%. The reallocation requires the sale of the previous 1/3rd allocation in Bonds.

Changes in the Conservative Portfolio: This model is adding a new 33% allocation in a LargeCap stock fund. The previous 2/3rds allocation in Bonds is reduced by half and the Large Cap allocation is increased to 66%.

Recommended Portfolio Allocations

Model Portfolio Details

The tables below provide the percentage allocation details and mutual fund ticker symbols for investors following the Model Portfolios by using funds from either of the Rydex Investments or ProFunds mutual fund companies -- or alternatively, investors using exchange traded funds (ETFs).

'Conservative Portfolio'

(A model portfolio that invests selectively in stock market index funds, a bond fund or money market funds, depending on current market trends for each type of investment. The allocation mix is designed to minimize potential losses while capturing most of the upside appreciation during strong, bull market conditions.)

Recommended Changes for this week	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
BUY LargeCap Fund	33%	RYZAX	33%	BLPIX	33%	SPY
Corporate Bonds, or Money Market Funds	Reduce Corporate Bond fund position by 1/2.

New Recommended Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
LargeCap Stock Fund	66%	RYZAX	66%	BLPIX	66%	SPY
Corporate Bonds, or Money Market Funds	34% Fidelity Investment Grade Intermediate-Term Corporate Bond Fund (ticker symbol FBNDX). ETF investors can use LQD or similar fund.

'Growth Portfolio'

(A model portfolio that invests selectively in stock market index funds, a bond fund or money market funds, depending on current market trends for each type of investment. The allocation mix is designed to avoid significant losses during bear markets and also beat the market during bull markets.)

Recommended Changes for this week	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
BUY LargeCap Fund	33%	RYZAX	33%	BLPIX	33%	SPY
Corporate Bonds, or Money Market Funds	Sell Corporate Bond Fund position.

New Recommended Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
LargeCap Stock Fund	100%	RYZAX	100%	BLPIX	100%	SPY
Corporate Bonds, or Money Market Funds	none