Trade Alert - October 8, 2006

Model Portfolio Allocation Changes- This Week

Take Some Profits in the Real Estate Sector

The market performed fairly well last week. The Dow set a new all-time high record. But more importantly, we saw a pick up in volume and the breadth of participation, showing some broadening of investor demand for stocks. However, the recent improvement in our technical statistics isn't enough to trigger a more bullish posture for any of our Model Portfolios.

The Performance Xtender model has triggered a reallocation to reduce the Real Estate sector fund weighting from 20% to 10%. The model is moving to take some profits and reduce the overall volatility of the portfolio.

Given the longer-term deterioration of our technical statistics that measure the underlying health of the market, our models' allocations remain constrained by a reduced volatility setting. This constraint enforces a bias to favor the less-volatile Large Cap stock segment and also downsize any of the more volatile "sector" fund investments when they become over-extended on a momentum basis.

Changes in the Performance Xtender: This model has triggered a reduction in the Real Estate sector fund allocation and a redeployment of the proceeds into an increase of the Large Cap sector fund allocation. Investors who are using the ProFunds line of funds to follow this model should note that the existing 15% allocation in Real Estate has been reduced to 7%, requiring a reduction by 8 percentage points. ProFunds investors will also need to reduce their existing money market fund allocation from 5% to 3% in order to increase their Large Cap allocation to 90%. [The ProFunds sector fund investments are adjusted in size to offset the fact that they are leveraged by a factor of 1.5 to 1.]

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 Real Estate	10%	RYHRX	8%	REPIX	10%	IYR
Increase LargeCaps	10%	RYZAX	10%	BLPIX	10%	SPY
Corporate Bonds, or Money Market	ProFunds investors should reduce Money Market funds from 5% to 3% in order to increase BLPIX to a 90% allocation.

New Model Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
LargeCap Stock Fund	90%	RYZAX	90%	BLPIX	90%	SPY
Real Estate Fund	10%	RYHRX	7 %	REPIX	10%	IYR
Corporate Bonds, or Money Market	Money Market Funds: 0% (ProFunds investors only: 3%)

'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 results in 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 LargeCaps	100%	RYTNX	100%	ULPIX	200%	SPY
Corporate Bonds, or Money Market	ETF Investors: Note that the SPY position should be leveraged 2 to 1.