Investment Report
Dynamic Asset Allocation
Volume 10 Issue 1
January 31, 2004
December and 4th Quarter Performance Summary
Period
TrendLogic Asset
Allocation Portfolio#
TrendLogic Avg.
Stock Fund Index
January
1.18%
2.39%
12 months
26.41%
43.30%
#Performance after fees.
A Good Start – It is always nice to have a
positive January, and we are pleased with the
1.18% return for the month. The January market
trend often – but not always - predicts the
direction for the year.
Benefits of Trend Following – TrendLogic’s
Asset Allocation program does not try to predict
the stock market. Almost all predictions about the
direction of the market are wrong, and those
which turn out right probably were due to luck.
The problem with predicting the future trend, as
an investment strategy, is that the future is
unknowable.
One element of TrendLogic’s investment strategy
is to track the trend of the market. The program
downloads price data on over 1,000 equity
mutual funds and calculates our Average Stock
Fund Index. It then calculates its percent
advance or decline. The main idea is to invest a
substantial percentage of assets in top-performing
equity funds when the market is advancing, as it
has been since March, 2003. When the market
begins to decline, as it did in March, 2000, the
program increases the allocation to cash for
preservation of capital.
NASDAQ
TrendLogic Fixed
Income Portfolio#
TrendLogic Avg. Bond
Fund Index
1.84%
3.13%
0.56%
0.80%
36.11%
56.42%
7.90%
8.06%
S&P500
On the top chart, the blue line shows the total-return
performance of the portfolio. If you look at the right
hand side, you will see it has been in an uptrend since
March, 2003. A glance at the Percent Invested chart will
reveal substantial allocation to equity funds during this
same period. By contrast, during the just past bear
market years, the cash allocation averaged over 55%,
and on five occasions reached 100%.
Asset Allocation Total Return Comparison –
Asset Allocation
S&P500
NASDAQ
3 Years
5 Years
13.0%
3.3%
10.8%
10.1%
-15.1%
-21.5%
92.0%
-13.7%
-11.6%
Even with the strong market over the past 10 months,
S&P500 and NASDAQ are still below their levels of 3
and 5 years ago, while Asset Allocation portfolio was up
10% and 92%, respectfully.
Fixed Income Portfolio Motors On - Our asset
allocation Fixed Income portfolio continues its steady
progress, up 0.56% in January, and 0.80% so far in
February. The 12-month total return of 7.90% compares
favorably with other fixed income investments. Since
1996, it has advanced in all rolling 12-month periods.
Could this be a place for part of your cash reserves?
Warren
2004
TrendLogic Associates, Inc.
2 Years
35 Mason Street, Greenwich, CT 06830
Greene
February
Telephone: 203-629-8705; 800-274-5448
13,
Page 2
January 31, 2004
Dynamic Asset Allocation Investment Program
32.00
30.00
TrendLogic Asset Allocation
(proforma net after fees)
28.00
26.00
vs. S&P500 & NASDAQ
12/31/97 to 1/31/04
Total Return
24.00
22.00
20.00
18.00
16.00
14.00
12.00
10.00
8.00
TrendLogic Asset Allocation
S&P500
NASDAQ
6.00
Dec-97
Mar-98
Jun-98
Sep-98
Dec-98
Mar-99
Jun-99
Sep-99
Dec-99
Mar-00
Jun-00
Sep-00
Dec-00
Mar-01
Jun-01
Sep-01
Dec-01
Mar-02
Jun-02
Sep-02
Dec-02
Mar-03
Jun-03
Sep-03
Dec-03
P e r c e n t In v e s t e d in F u n d s a t M o n th - e n d
100
80
60
S m a ll B le n d
S m a ll G rw th
W o r ld S to c k
Tech
R eal
E s ta te
V a lu e
Ja
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S m & M id
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V a lu e
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ay
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t ea l u e
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Ja
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ay
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Tech
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L a rg e
G ro w th
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Japan
In t 'l
S m a ll
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ay
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H e a lth
L a r g e B le n d
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N a tu ra l re s o u rc e s
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40
Portfolio Holdings on January 31, 2004
Fund
Sector
Buy Date
Gain/Loss
Fund
Sector
Buy Date
Gain/Loss
Oppenheimer Value A
Large Value
12/31/03
2.62%
Oppennheimer Sm Cap Val A
Small Blend
10/14/03
12.76%
AllianceBerman Mid-Cap Growth
Mid-Cap Growth
1/7/04
4.95%
RS Internet Age
Technology
1/13/03
-0.70%
Fidelity AdvisorsTechnology
Technology
1/15/04
-3.43%
Rydex Merkkos
Small Blend
1/6/04
2.80%
Fidelity Advisors Value Strat.
Small Blend
1/27/04
-3.25%
Security Mid-Cap Growth
Mid-Cap Growth
1/21/04
-3.86%
Scudder Flag Equity Partners
Large Value
12/3/03
7.93%
Scudder Latin America
Latin America
12/23/03
0.82%
Scudder New Europe A
Europe Stock
12/1/03
7.48%
Hancock Small Cap Equity
Small Growth
11/13/03
7.90%
Keeley Small Cap Value
Small Blend
12/31/03
3.25%
SSgA Small Cap
Small Blend
11/4/03
6.74%
Eclipse Small Cap Value
Small Value
10/10/03
20.0%
TCW Galileo Small Cap Growth
Mid-Cap Growth
1/19/04
-3.03%
MainStay Equity Income
Mid-Cap Value
12/22/03
2.12%
TrendLogic Associates, Inc. is a SEC registered investment adviser. The firm manages portfolios for individuals,
corporations, endowment funds and retirement plans. You are welcome to call 800-274-5448 for further
information, or e-mail wgreene@trendlogic.com. Website: www.trendlogic.com
TrendLogic Associates, Inc.
35 Mason Street, Greenwich, CT 06830
203-629-8705; 800-274-5448