All Three Models Outperform in January

One down, eleven to go....

Top 20 gained 6.4%, almost 2% ahead of the S&P 500.  One of the key drivers of the strong performance was improvement in the demand for Small-Cap stocks.  We were also aided by our lack of exposure to the weakest sectors, which included Utilities, Telecom Services and Consumer Staples.  Looking at the returns of our holdings, the dispersion was rather extreme.  One stock plunged, another was soft and six rose more than 10%.

Conservative Growth/Balanced gained 4.8%, well ahead of the benchmark of 60% stocks and 40% bonds, which rose 3%.  The strong performance was aided by some Small-Cap exposure, avoidance of traditional "conservative" sectors (all of which declined), heavy exposure to Technology and close to our maximum equity exposure of 75% for most of the month.  4 names rose more than 10%, while only 1 declined.

Sector Selector ETF had a stellar month, recovering almost all of the underperformance in 2011 (following the launch in late April near the peak of the market), with the model up 8.3% (3.8% better than the S&P 500).  Small-Cap exposure was the biggest driver of the performance, but sector selection (heavy weightings of Financials and Technology) and a big bet on Emerging Markets also contributed to the strong results.  Every single holding outperformed the S&P during the month.