Investment
Strategies, Inc.
Strategy Update

www.isi-su.com

Free Weekly Strategy Update

on ISI's 2040 Weekly Stock Market Model

beat the market, reduce your risk

The market, as measured by our Major Stock Market Index-Total Return Fund or MSMI-TR Fd1, gained 0.69% for the week, while treasury-bill yields rose to a 0.165% annualized yield.  Despite the gain from the early March 2009 lows, measured from the stock market peak on 10/12/2007, the MSMI-TR Fd1 has dropped over 37% from the October 2007 high!

As of Friday, June 12th, our basic Weekly Stock Market Model or W2040 remained on a 100% stock market exposure, leaving a 0% balance in a default money market fund.  Investors employing the Rydex S&P 500 2x Strategy Fund should increase their Rydex S&P 500 2x position at 50% (which equals 100%, as detailed below), with the remaining 50% in the Rydex U.S. Govt Money Market Fund.  Our New Funds Signal or NFS  (for positioning new capital) remains on a green reading and suggests moving forward with positioning new monies in the stock market via an index mutual fund that tracks the S&P 500 Index.

The basic W2040 had been 100% in money market funds since June 6th of 2008 and missed all of the market's multi-month plunge - down 35.5% from 6/6/2008 to 4/9/2009 - before returning to a risk-exposure of 50% stock market on 4/9/2009.  (The model increased to a 100% position on June 5th.)  The capital saved by the W2040 model clearly demonstrating the value of this simple mathematical risk management tool.  As the famed Will Rogers observed during the 1930s, "I worry more about the return OF my money than I do about the return on my money."  Today, investors worldwide are reconnecting to the wisdom of Will Rogers.

In sum, W2040 remains on a 100% aggressive posture, and NFS is on a green signal and suggests investing additional funds.

The 4-page summary, 11x17 booklet format, provides a graphic and narrative overview of ISI's W2040 model from its mathematical inception on December 31, 1899.  See firsthand how W2040 has outperformed its stock market benchmark by 4.69 times cumulative, with less than 1/2 the risk, as measured by Modern Portfolio Theory or MPT over its nearly 109 year history covering 26 full market cycles.

ISI's W2040 Model, cum

W2040 is a theoretical mathematical model, which illustrates the viability of an objective, disciplined approach to stock market investing.  It is not a projection or guarantee of future results with any stock market index or ISI mathematical model.  One can expect actual results to vary.  ISI is an economics modeling firm and is not a registered investment advisor with the SEC or any state.  Mutual funds listed on ISI's candidates list are provided for convenience of interested parties and are completely separate from ISI.  In addition, ISI does not recommend any index-type mutual fund on this list and investors are encouraged to do their own analysis and selection.

Index Fund Candidates for W2040

100 %

0 %

4.63 to1

ISI's W2040 Weekly Stock Market Model . . . Current Market Cycle 3/24/2000 to 11/7/2008
Click here to view .PDF for latest update of  ISI's W2040 Current Market Cycle Report from the market top on 3/24/2000 to11/7/2008 - a period covering 1 1/2 market cycles (two bear and one bull market) 

This seven page report starts with a graphic and narrative Front Page which provides a quick overview of the current market that began with the 3/24/2000 peak. This is followed by five pages of tables which include W2040's weekly allocations and the returns for the stock market benchmark and risk-free treasury bills. Page Seven provides W2040's overall Risk & Reward Profile from inception.

W2040 current market cycle

$ 71.94 

$ 111.55

1.55 to 1

pending

** MSMI-TR Fd is based on a total return approach to stock market investing, which include modest costs for ownership.  The MSMI-TR Fd factor price change - for gain or loss - and dividends (based on actual reported dividends for the S&P 500) to determine total return. In addition, the MSMI-TR Fd, which is constructed as a hypothetical index-type fund tracking the S&P 500 has an expense factor of 0.18% annual rate.  The money market portion is based upon historical rates of 90-day treasury bills with 0.20% annualized expense factored.  None of the market indexes or ISI W2040 model factor income taxes.  Past performance of the stock market or any ISI model is not a guarantee or predictor of future results.  ISI's mathematical models are based on market data believed to be, but not guaranteed, accurate.

***  Management Ratio (M/R) measures the ISI model’s ability to out-perform a buy & hold strategy for each market type or for a full market cycle. It compares the ending value of $1.00 invested at the start of each period. The M/R is determined by dividing the specific ISI model gain or loss by the benchmark’s gain or loss. A ratio above 1.00 indicates superior performance (and vice versa).

ISI's W2040 Model with Rydex S&P500 2x Strategy Fund ****

100 %

50 %

 50 %

$ 71.96

$119.36

1.66 to 1

**** Rydex Index Funds  group is one of most creative mutual fund families specializing in leveraged major market index funds and various sector index funds.  A no-load group ideal for independent investors desiring unmanaged index funds and ultra flexibility. 

The goal of Rydex S&P 500 2x Strategy Fund (which is part of the Rydex group of index funds) is to double-leverage the return of the S&P 500 Stock Index - both up and down .  For example, if the S&P were to gain 1% on a given trading day, this Rydex fund's goal would be to gain 2%, and vice versa.  Investing in the Rydex S&P 500 2x Strategy Fund does involve the potential for higher return than the S&P 500 and a greater loss in declining periods.  An investor should carefully read the fund's prospectus before making an investment in this index-type fund.

ISI has over nine years experience using the Rydex funds for its own accounts and for various mathematical modeling and subscription investment services.  Mr. Sabby, president of ISI, rates the Rydex group of index funds as the best overall environment in his 37 years of experience with fund families and discount brokers.  Although ISI employs various Rydex funds, this is not a specific recommendation or endorsement of any Rydex fund.  ISI does not receive any type of compensation from Rydex, either directly or indirectly, for referrals made on this page.

See ISI's Market-Beating Mathematical Models for Subscriber Clients webpage for additional information on other ISI mathematical models offered for subscription and under license to Investment Programs LLC, a federally-covered advisor registered with the SEC.