Trade Alert - April 2, 2006

Model Portfolio Allocation Changes- This Week

Gold Stocks Renew Uptrend

Our Performance Xtender model has been in and out of Gold stocks over the past two years, milking the historic new bull market in Gold. The model triggered a sale on March 23rd to exit Gold stocks (see small red arrow on chart) and thereby protected the profits earned during the previous surge.

But now the model is reversing its position and re-entering the 20% allocation in Gold stocks ... this after last week's upward thrust in Gold strongly suggested that the minor correction is over.

You might be wondering why the model previously sold the position in the first place ... clearly we would be somewhat better off now if it hadn't sold . But that is clear to us now only after-the-fact. The mathematical logic in the model can't see into the future. It can only work on statistical probabilities. And the fact is, the recent correction that has played out over the past seven weeks could have been much more severe ... in fact there was a decent possibility we could have lost most or all of the unrealized profits that had been earned. And, the risk-averse logic of this model would not allow that.

Gold stocks are included as an investment option in the model because they can offer a very valuable dimension to a portfolio, particularly during times of market distress. But they are also very volatile. To capture the inherent value in Gold without suffering the full force of the downside risk, the model triggers investments in Gold stocks only according to very strict rules. In addition, the model uses a strict "stop loss" trigger to protect profits. So, it gets into Gold carefully and gets out quickly -- as soon as the trend breaks down. In this way, we seek high rewards with a manageable level of risk.

In the Performance Xtender: This model is reducing its 60% allocation in LargeCap stocks by 1/3rd to 40% of the portfolio. The proceeds are being reallocated into a new, 20% allocation in Gold stocks.

In the Max Extender: There are no changes in this model.

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
REDUCE LargeCaps	20%	RYZAX	20%	BLPIX	20%	SPY
BUY Gold Stock Fund	20%	RYPMX	15%	PMPIX	20%	GLD
Corporate Bonds, or Money Market	ProFunds investors: Reinvest only 15% in PMPIX and put remaining 5% allocation in Money Market funds.

New Model Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
SmallCap Stock Fund	40%	RYAZX	40%	SLPIX	40%	IWM
LargeCap Stock Fund	40%	RYZAX	40%	BLPIX	40%	SPY
Gold Stock Fund	20%	RYPMX	15%	PMPIX	20%	GLD
Corporate Bonds, or Money Market	Money Market Funds: ProFunds investors only should be holding a 5% 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
No Changes	-	-	-	-	-	-
.	-	-	-	-	-	-
Corporate Bonds, or Money Market	-

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 LargeCaps	50%	RYZAX	50%	BLPIX	50%	SPY
Corporate Bonds, or Money Market	ETF Investors: Note that the SPY 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.