Trade Alert - January 28, 2006

Model Portfolio Allocation Changes- This Week

Small Cap Stocks Lead Once Again

The market recovered nicely last week, advancing 1.8% to recover most of the steep losses from the week before. Small Cap stocks significantly out-performed, gaining 4.0%. Also, Mid Cap stocks ... which have out-performed for several months ... gained 2.4%.

• The recent performance of Small Cap stocks has now been strong enough that our Model Portfolios are triggering them back into the portfolio mix (see portfolio changes below).

Bull Market Trend is Intact: So far the market's bullish up-trend is intact and the break-out January 6th above the 1268 level on the S&P 500 Index has held. This is all good news. And the return of Small Cap stocks to a leadership position is a positive indication that this bullish move has a ways to go.

However, our analysis of longer-term indicators of the market's underlying health suggest that we may be in the final stage of the bull market that began over three years ago. As a result, we should expect an increase in market volatility during the next several months and an eventual break-down in the market that should lead either to a deep correction or a new bear market cycle.

In the Performance Xtender -- This model portfolio has triggered a shift out of the 20% allocation in a Large Cap stock fund, putting the proceeds into a Small Cap stock fund. The move does not reduce the portfolio's overall exposure to the stock market.

In the Max Xtender -- This model is shifting part of its leveraged Mid Cap stock position into a leveraged Small Cap fund. This change leaves the model portfolio with a 1.5-times exposure to the stock market but changes the mix to a blend between Mid Cap and Small Cap stocks. Taking the leverage into account, the new allocation mix is 1/3rd Mid Cap and 2/3rds Small Cap.

New Model 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).

'Performance Xtender'

(A model portfolio that invests selectively in stock market index funds, plus certain market sectors such as Energy, Gold and Real Estate, and in an Inverse Fund ("Bear Fund"), depending on current market trends for each type of investment. The allocation mix is designed to beat the market significantly during both bull and bear markets with only limited risk of volatility.)

Model Portfolio Changes for this week	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
SELL LargeCap Fund	20%	RYZAX	20%	BLPIX	20%	SPY
BUY SmallCap Fund	20%	RYAZX	20%	SLPIX	20%	IWM
Corporate Bonds, or Cash	-

New Model Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
SmallCap Stock Fund	20%	RYAZX	20%	SLPIX	20%	IWM
Gold Stocks Fund	20%	RYPMX	15%	PMPIX	20%	GLD
Energy Stocks Fund	20%	RYEIX	15%	ENPIX	20%	XLE
MidCap Stock Fund	40%	RYAVX	40%	MDPIX	40%	MDY
Corporate Bonds, or Cash	Money Market Funds: ProFunds investors only should be holding a 10% allocation in Money Market.

'Max Xtender'

(A model portfolio that invests selectively in stock market index funds and in an Inverse Fund ("Bear Fund"), depending on current market trends for each type of investment. During strong market trends ... either bullish or bearish ... the model uses up to 2-to-1 leverage to magnify returns. The allocation mix is designed to beat the market substantially during both bull and bear markets but with a relatively high risk of volatility.)

Model Portfolio Changes for this week	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
SELL Lev'd MidCap	-	-	50%	UMPIX	100%	MDY
BUY Lev'd SmallCap	-	-	50%	UAPIX	100%	IWM
Corporate Bonds, or Cash	NOTE: There is no change for Rydex fund investors because Rydex has neither a leveraged SmallCap nor MidCap fund ... we have substituted a leveraged LargeCap instead.-

New Model Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
Lev'd SmallCap Fund	50%	RYTNX	50%	UAPIX	100%	IWM
UnLev'd MidCap Fund	50%	RYAVX	50%	MDPIX	50%	MDY
Corporate Bonds, or Cash	ETF Investors: Note that the MDY position is un-margined and IWM is margined 2-to-1. Rydex Investors: Note that Rydex does not have a leveraged SmallCap fund, so we have substituted RYTNX.