Though the specific placement of our strike prices creates a “local” tendency for the Strategic Growth Fund to move slightly counter to market movements of a few percent, our current fully-hedged investment stance does not reflect a net short position (it never does), and is intended to achieve positive returns regardless of the direction of any extended market movement. At present, if the Strategic Growth Fund was simply to remain unchanged in the face of a further market decline, the S&P 500 would have to fall by less than 15% to put the total return of the Fund ahead of the S&P 500 for the most recent 5-year period (which excludes the 2000-2002 bear market). To the extent that the stocks held by the Fund perform worse than the indices we use to hedge, the Fund could achieve a negative return despite its hedged investment position, and the market decline needed to place the Fund ahead of the S&P 500 since the beginning of 2003 would be larger than 15%. As of last week, the Market Climate for stocks remained characterized by unfavorable valuations and unfavorable market action, holding the Strategic Growth Fund to a fully hedged investment stance. Read More