HEDGEfolios year-to-date stock performance for 2008 (through 06/30/08 close) was up 16.15%.

Over the same time period, the S&P 500 index was down -12.80%.

At the end of June, the HEDGEfolios universe consisted of 3,405 stocks.

Commentary: The first half of 2008 is complete and it certainly has not been easy. With a 16.15% gain in the HEDGEfolios universe vs. a -12.8% loss for the index, I am quite happy with the performance. While I’ve managed to be bullish 73% of this year (19 out of 26 weeks), the outperformance has come from downside hedging at appropriate times and in June, I went from approximately 70% bullish signals at the beginning to approximately 70% bearish signals by the end. For the second half, I’d really like to see reduced turnover but I doubt the volatility is over. The first 6 months have been affected by continuing credit problems, high oil prices, increasing inflation, rising unemployment, and a host of challenges to consumers and corporations. Yet, there is a persistent belief that all this bad stuff is temporary and the worst is behind us. The market may believe that, but I do not.

Here is the performance chart of HEDGEfolios vs. the S&P 500 for 2008.

Prior Years’ Performance:

• 2007, HEDGEfolios performance was +21.78% vs. + 3.55% for the S&P 500 index
• 2006, HEDGEfolios performance was +25.54% vs. +13.62% for the S&P 500 index
• 2005, HEDGEfolios performance was +19.99% vs. + 3.00% for the S&P 500 index
• 2004, HEDGEfolios performance was +31.19% vs. + 9.00% for the S&P 500 index

Disclaimer: Nothing in my performance quoting is intended as an advertisement or in any other way meant to encourage anyone to subscribe to HEDGEfolios. These performance figures have not been audited or verified by an outside party and are NOT in compliance with the CFA’s AIMR Performance Presentation Standards. They don’t net out any transaction costs such as commissions or management fees and are not a total return calculation as I do not include dividend yields or any compounding factor. These performance figures cover a hypothetical portfolio of the entire HEDGEfolios stock universe with an equal weighting of each security. The calculation is simply the cumulative total of all gains and losses from the signals during the period in question.