HEDGEfolios year-to-date stock performance for 2008 (through 05/30/08 close) was up 13.17%.

Over the same time period, the S&P 500 index was down -4.60%.

At the end of May, the HEDGEfolios universe consisted of 3,420 stocks.

Commentary: At the end of April, I said that I doubted the soft landing concept and that HEDGEfolios would stay so positive this month. I was not so accurate on those assumptions. The economic data (as presented) was certainly Goldilocks-like and appeared to conform to the possibility of a soft landing. Jobs data wasn’t so bad, inflation was bad in the PPI, not so bad in the CPI /PCE measures, etc. etc. But like anything else, we all see what we want to see. Those who feel the worst is behind us buy into any number that support their cause and the doom-and-gloom crowd love to pick apart the data and explain how fraudulent or wrong it is. In the end, at least in my world, the bulls had the final say during May. Other than a sudden awakening to and fascination with high oil prices, the stock market as measured by the S&P 500 index was relatively calm and boring with a slight upward bias of 1.06%. I started off the month with 80% UP signals and had expected that to decline. It did - but only dropped to 76% and during the month, turnover was lower than normal with almost an equal number of new UPs and new DOWNs each week regardless of the dominant market direction. To say the least, I am impressed by the bullishness - justified or 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.