At market close on 01/31/2008, the total Covered Calls Advisor Portfolio (CCAP) value was $243,884.68, a $14,001.83 decline in the overall portfolio value since the closing value of $257,886.51 on 12/31/2007.
CCAP January 2008 Absolute Return = -5.4%
Jan. 2008 Absolute Return for SWBGX Benchmark = -3.3%
The underperformance of the CCAP compared with the Schwab MarketTrack Balanced Portfolio (SWBGX) benchmark in January is a result primarily of the overweighting in technology which was a below average performer and the large decline in the value of the South Korea ETF. An overweight position in the technology sector is being maintained in February as is the position in South Korea. In this advisor's opinion, both of these areas now provide exceptionally compelling value opportunities.
Although January's performance was disappointing, the Market Meter is still indicating that a slightly bullish investment position is appropriate at this time. The corresponding covered calls investing approach of writing primarily slightly out-of-the-money covered calls will be continued at this time. For 2007, the +10.7% CCAP annualized return exceeded by a substantial margin the +2.2% annualized return of the SWBGX benchmark. Despite the underperformance in January, the objective for CCAP in 2008 will continue to be to exceed our primary benchmark (SWBGX) as well as all other major stock, bond, and money-market benchmarks.
Regards and Godspeed to All,