Many newsletter writers like to go it alone. Dynamic Growth on the other hand was the brain child of a discussion between John Mugarian, and his good friend Louis Navellier.

"I asked Louie if he and his research team at Navellier & Associates could apply their impressive stock picking system to No-Load Sector Mutual Funds ETF's. After running a number of sector mutual funds through Navellier's proprietary research, we were both stunned by the incredible performance!"

If an investor had simply invested in our Top 10 Fund picks each and every month, and equally weighted those picks from July 2001-May 2006 the 59 month **back-tested returns** (As calculated by Navellier & Associates) were as follows:

• Top 5 no-load sector funds in our database soared 114.47%.
• Top 5 ETF's gained 94.26%
• Top 10 no-load sector funds gained 100.50%
• Top 10 ETF's gained 89.42%
• Top 15 gained 98.85%.
• Top 15 ETF's gained 77.85%
• Even the more diversified portfolio of 15 funds handily beat the Russell 3000 which gained 18.71%.

"Harnessing the Power of Sector Investing"

Definition: - The movement of money into various industry sectors that only provide the best investment results, and avoiding the sectors that do not.

The Strategy: - Identifying top ranked sectors that will provide superior results in the coming stages of an economic cycle.

The Goal: -To successfully identify which industry sectors will beat the market averages, and exhibit superior performance to the S&P 500 averages.

"If you are in the right sector at the right time, you can make a lot of money very fast...."- Peter Lynch in "Beating the Street"

Market & Economic Cycles:

Market Cycle in Four Stages
Markets move up and down just like the economy. For the purpose of this discussion, we will divide that cycle into four stages

Economic Cycle in Four Stages
Here is a list, in the same order as above, of four basic stages of the economic cycle, and some associated telltale signs - again, keep in mind that these usually trail the market cycle by a few months.

Market Sectors

1. Cyclicals
2. Technology
3. Industrials
4. Basic
5. Industry
6. Energy
7. Staples
8. Services
9. Utilities
10. Financials

Sub-Sectors within Sectors:
At times, investing in a sector is not enough. For example, you'll see that the energy sector actually has 4 sub-sectors:

Oil & Gas
Energy Equipment & Services
Gas Utilities
Natural Resources

1. Not every sub-sector will perform the same. For example, Oil &Gas, and Equipment & Services may outperform Gas Utilities by a wide margin.
2. Our highly sophisticated selection process we identifies which sub-sectors will perform the best. We re-evaluate every sector on a weekly and monthly basis.
3. Sector Rotation investing is not about market timing; it's about being in best sectors as the economic and market cycle changes.

Dynamic Performance: Harnessing the Power of Sector Investing
Since their inception in the 1980's, the Best and Worst performing mutual funds every year are Sector Funds. Sector rotation using a variety of mutual funds is possibly the best method to maximize returns without the exposure to individual stocks. Being in the right sector at the right time is the key.

Our Sector Rotation strategy identifies the sectors that will exhibit superior performance as trends and changes occur in the economy, interest rates, and the capital markets. We want to take advantage of the changes in the Economic and Market Cycles, rather than becoming a victim of it.

1. Fidelity Select Funds
2. Exchange Traded Funds- ETF

Fidelity Sector Funds:
The Fidelity Specialty Select mutual funds are a large family of 41 funds representing a vast array of sectors. The Select funds offer a great deal of diversity, are professionally managed and have been very strong performers. Rather than going through the pain-staking process of identifying individual stocks, we use actively managed mutual funds.

Fidelity's professional fund managers have the time, knowledge, and resources that most investors do not. Every sector fund manager only selects in the highest ranked stocks in their sector to ensure maximum results.

Here is an alphabetical list of the 41 Fidelity Select Sector Funds:

1. Air Transportation
2. Automotive
3. Banking
4. Biotechnology
5. Brokerage/Inv. Mgt
6. Business Services/Outsourcings
7. Chemicals
8. Computers
9. Construction & Housing
10. Consumer Industries
11. Cyclical Industries
12. Defense & Aerospace
13. Developing Communications
14. Electronics
15. Energy
16. Energy Service
17. Environmental
18. Financial Services
19. Food & Agriculture
20. Gold
21. Health Care
22. Home Finance
23. Industrial Equipment
24. Industrial Materials
25. Insurance
26. Leisure
27. Medical Delivery
28. Medical Equipment/Systems
29. Multimedia
30. Natural Gas
31. Natural Resources
32. Networking & Infrastructure
33. Paper & Forest Products
34. Pharmaceuticals
35. Retailing
36. Software/Computer Services
37. Technology
38. Telecommunications
39. Transportation
40. Utilities Growth
41. Wireless

1. 41 Fund Choices: Fidelity pioneered the sector investing concept in 1981.
2. Professional Management: Over 600 portfolio managers, analysts, and traders world-wide.
3. Several Account Choices: Fidelity sector funds are available for brokerage as well as retirement accounts. Fidelity retirement accounts include 401k, Regular IRA's, Roth IRA's, Rollover IRA's, SEP-IRA's, as well as Keogh's.
4. Low Minimum Investments: The minimum investment required in opening a regular or IRA account in any Fidelity Select fund is $2,500. The minimum investment required to open a SEP-IRA or Keogh account in any Fidelity Select fund is $500.
5. Low Costs: Fidelity mutual funds are no-load funds. There are no fees for exchanges done through the Internet when the investment is held over 30 days. This works to our advantage since our holding duration for sector fund investments is typically 6 months or longer. (Note: The Fidelity Select fund prospectus provides a description of the fees & expenses associated with these funds. Read the fund prospectus carefully before investing.)

Exchange Traded Funds- ETF
In recent years, Exchange Traded Funds have exploded in popularity and has emerged as one of the most flexible, multi-purpose investment vehicles available. Exchange traded funds (ETFs) are index funds that allow investors to invest in specific sectors of the stock and bond market.

Unlike mutual funds, Exchange Traded Funds are not managed, resulting in lower transaction costs than actively managed portfolios. Because they are exchange traded, ETFs can be bought and sold at intraday market prices.

1. Equity indexes (such as total market, large-cap growth, and small-cap value)
2. International and country-specific equity indexes (such as Europe, EAFE, and Japan)
3. Sector-specific equity indexes (such as healthcare, energy, and real estate)
4. Bond indexes (such as long-term Treasury bonds and corporate bonds)

With 66 different industry funds, and 34 International Funds, and over 79 Broad based funds to choose from, an investor can become overwhelmed with the choices. Well, worry no more. Sit back and allow us to do all the work.

The Index Fund Myth:

Diversification has been touted as the best way to spread risk and to diversify among the worlds markets and the world's economies. If this is true, then why have small cap, mid cap and Blue Chips ALL declined in the bear market? Could it be that diversification is not enough? We think so. The old adage that "there is always a bull market somewhere" rings true.

Today, diversifying in different Asset Classes such as Large Cap, Small Cap, Mid Cap, and International is not enough. It is a known fact that 80% of professional fund managers cannot achieve gains better than the market benchmark average of the S&P 500.

You can see from the model above that only 3-4 Sectors may be in favor during certain times in the Economic and Market Cycle. Since most Asset Class Funds (Large Cap, Blue Chip, Mid Cap, and Small Cap) are diversified in every sector for diversification, they may turn in mediocre performances since they must balance their portfolios in sectors that are performing along with sectors that are not.

For example, let's look at the make-up of Vanguard S&P 500 Fund:

Vanguard S&P 500 Fund Results: (as of 06-30-06)

YTD Performance: +2.67%
5-Year Average Return: +2.38%

As you can see from this example, many of the sectors that make up this portfolio are out of favor. The 4 sectors currently in favor (Energy, Services, Healthcare, and Utilities) only make up 33.4% of the portfolio.

Dynamic Growth (back-tested) Returns: (July 2001- May 2006) Our Top 10 Sector Mutual Funds: +100.50%