Issue Outline

Published monthly, the StreetAuthority Market Advisor is an invaluable resource for self-directed investors looking to earn above-average profits in the equity markets. Below you will find an issue outline that explains the specific content you're likely to see in each of our newsletter sections. Please use it as a guide to help you get the most out of our Market Advisor newsletter.

(1.)  WEEKLY MARKET RECAP  (Issue Outline)

In this section of the newsletter we give a quick overview of how the Dow Jones Industrial Average, the S&P 500 Index, the S&P MidCap 400, the S&P SmallCap 600 and the Nasdaq Composite have performed on a percentage basis both in the last week and year-to-date.  Our goal here is to give you an idea of where the markets stand right now and which direction they've been moving in recent weeks/months.  And by covering not only the major three indices (Dow, S&P 500 and Nasdaq), but also the smaller S&P MidCap and S&P SmallCap indices, we aim to show you which areas of the market (the high-tech Nasdaq, smallcap stocks, midcap stocks, bellwether Dow giants, etc...) are delivering the biggest gains right now.

We also list the top five best- and worst-performing industry groups over the past month and the top five best- and worst-performing industries over the course of the calendar year.  Since industry movements can have a big impact on individual investments, and since investors can also earn sizable profits by taking advantage of short-term industry momentum, we think it's important to track these fast-moving industries very closely.

Below you will find a comprehensive listing of all 128 industry groups that we track for this newsletter...

(2.)  MARKET COMMENTARY  (Issue Outline)

Our opening market commentary features the following:

• Our take on the recent action in the overall marketplace.
• A listing of key happenings on the corporate and economic front.
• The current bullish and bearish story in the market right now.
• Our predictions on where the markets are headed in the short- and medium-term.
• An explanation of trends/opportunities that we’re witnessing now and how you can profit from these trends

• Specific, actionable stock tips and advice.
• In-depth analysis of various winning industries/sectors.
• A focus on paradigm shifts or new technologies that could revolutionize their respective markets.
• In-depth analysis of different investing strategies and a listing of specific stocks that could help you profit from those strategies.
• An examination of new investing ideas that we're considering adding to our various model portfolios.

We begin our Sector Spotlight section with a top-down, fundamental analysis of a particular sector or industry group that we feel is attractive for a number of reasons. Those reasons may include a recent positive change in an industry that we believe could benefit certain stocks. Conversely, we may discover short-term events that have sent an industry temporarily lower, producing opportunities to shop for bargains. In this section, we also provide a bit of education on the sector fundamentals that have historically produced positive or negative impacts for its component stocks. This enables you to know what to look for or avoid in the future. For example, rising or falling interest rates historically have had a dramatic impact on financial stocks. Similarly, rising or falling consumer confidence levels tend to have a big influence on retail stocks.

Based on our sector analysis, we then look for stocks that have been the best performers relative to their peers (although on occasion, we may look for the worst performer if in our analysis we find a catalyst that could change the outlook for the stock). Once we have analyzed the best relative performers, we compare the fundamentals (earnings growth, valuations, etc.) of the top stocks within the sector. We then provide you with a table that includes key fundamental data for the top three of four stocks within the sector. Next we profile a favored stock and tell you why we like it. 

We instituted this section of the newsletter in our May 19th, 2003 issue of the StreetAuthority Market Advisor.  At that time, we placed $20,000 in the S&P 500 and another $20,000 in our "Beat the S&P" Portfolio, which includes a mixture of stocks and funds that we believe have the best potential to outperform the S&P over the long haul.

Since that time, we have tracked the value of this portfolio relative to the S&P, and in each regular issue we've given you a summary of our performance so you can see exactly how we stack up against this widely tracked index. Our primary goal, of course, is to hold a batch of stocks and funds in our "Beat the S&P" Portfolio that will outperform the S&P 500 over the long haul.

HOW DOES THIS NEW NEWSLETTER SECTION HELP YOU?
Well, for starters, it provides you with highly actionable information. Instead of just listing our favorite investing ideas, our "Beat the S&P" Portfolio provides you with more specific direction regarding add/remove dates and dollar amounts we're going to invest in each of our top picks. (Remember: Any and all final investing decisions for your own account are entirely up to you. Please use this sample portfolio, as well as all of our other sample portfolios, only as a starting point for further research on your end.)

This newsletter section also makes it much easier for you to track our performance. We put our money where our mouths are and go head-to-head against the S&P. Since the majority of professional money managers fail to beat this widely tracked index each year, this is no easy task. However, we welcome the challenge and we sincerely hope that you benefit from this section of the Market Advisor. Please read on to learn more about how we manage our "Beat The S&P" portfolio.

GENERAL NOTES ABOUT OUR "BEAT THE S&P" PORTFOLIO

• Whenever we make a change to our portfolio mix, we will always inform you of this ahead of time in our regular Market Advisor newsletter or via a special News Flash.

• We started this portfolio with $20K in May, 2003, and we will never add any additional funds to it during the coming  years. Therefore, before we can add a new security to our portfolio, we always need to either draw down our cash balance or to sell another one of our existing holdings.

• Since the Market Advisor is a long-term-oriented publication, we generally try not to make frequent changes to our "Beat the S&P" Portfolio throughout the year. This should makes it easier for you to track our portfolio, and should also reduce transaction costs for those subscribers interested in emulating our performance.

• Since commission prices vary by broker, there is no way for us to provide an accurate gauge of these. We recommend that you use Interactive Brokers, which charges roughly $1 per trade for most small stock orders. Unless you trade very frequently or your portfolio size is very small, your transaction costs should not have much of a meaningful impact on your annual returns. With this in mind, we do not incorporate commissions into our profit/loss calculations.

STRATEGIES WE EMPLOY IN AN EFFORT TO OUTPERFORM THE S&P 500

• We generally draw most of our "Beat the S&P" picks from our other various recommended Portfolios since these already include most of our favorite stocks and funds.

• On occasion we add picks we've identified using our proprietary SVI (StreetAuthority Value Indicator) quantitative model or using one of our weekly INSIDE THE NUMBERS scans.

• In an effort to show profits in both bull AND bear markets, we may include short sales in our "Beat the S&P" portfolio.

• Since we usually to want to keep a certain amount of cash on the sidelines to invest in new opportunities as they arise throughout the year, our portfolio will almost never be fully invested in individual stocks. But instead of holding cash, which will earn zero returns, in most cases we put our extra money in the S&P Depository Receipts (SPY). This exchange-traded fund tracks the performance of the S&P 500 and can be bought and sold in the open market just like a regular stock. By holding this unique instrument instead of cash, we ensure that our excess funds perform in line with the S&P 500.

• On the other hand, in special instances where we feel the S&P might be due for a near-term correction, we may hold a sizable cash balance. (In extreme cases we might even decide to short SPY to profit from a declining market.)

Please visit this link to view a listing of all previously-closed "Beat the S&P" Portfolio trades.

Again, the primary goal of our "Beat the S&P" Portfolio is to provide you with more specific, actionable information that you can use as a guide when making your own investing decisions. It should also make it easier for you to gauge our performance relative to the S&P throughout the year. But remember: Any and all final investing decisions for your own account are, of course, entirely up to you. Please use this sample portfolio, as well as all of our other sample portfolios, only as a starting point for further research on your end.

(c) Copyright 2001-2005.  StreetAuthority LLC  All Rights Reserved.
 Unauthorized Reproduction or Distribution is Strictly Prohibited.