Model Portfolio Performance Update

The following tables show the total returns for each of our specifically recommended funds, along with the percent we recommended for that fund within each Model Portfolio. As mentioned in this month's main articles, the difference from our prior Newsletters is that we now show you how each chosen fund compared to its category average, either doing better or worse.

Our Specific Stock Fund Selections Over the Last One Year

Specific Fund We Recommended (Fund Symbol) Percent of Portf.	1 Yr. Tot. Ret. vs (Category Average Tot. Ret.)	Performance Advantage/Disadvantage For Our Specific Fund
Vanguard Growth Idx (VIGRX) 25%	+1.7% (-1.9%)	+3.6%
Vang. Internat. Growth (VWIGX) 20%	-13.7 (-13.4)	-0.3
Vang. Large-Cap Idx (VLACX) 17.5%	+1.4 (-0.7)	+2.1
Fidelity Low Price Stock (FLPSX) 5%	-0.1 (-4.7)	+4.6
T Rowe Price Equity Income (PRFDX) 10% or	-0.7 (-2.2)	+1.5
Vang. Financials ETF (see Note) (VFH)	-14.4 (-13.6)	-0.8
Vang Mid-Cap Growth Idx (VMGIX) 10%	-3.8 (-4.3)	+0.5
Vang. Small Cap Idx (NAESX) 12.5%	-2.8 (-3.4)	+0.6

Note: VFH for aggressive investors only

Most of our specific fund choices outperformed their category averages. The average outperformance for the 8 funds was +1.5%.

2011 was a year where only a very few specialized fund categories were able to beat the S&P 500 Index, which returned +2.1%. Investors' portfolios including any type of international fund were particularly dragged down, with the average such fund down 13.4% and with emerging market funds down more than 20%. Since we, and most investors, had a not insignificant allocation to international funds, it would be nearly impossible, in this case, to beat the US-only S&P 500 Index. In fact, an index to all stock markets around the globe, including the United States, developed foreign markets, and emerging markets returned -7.6 vs -4.6% for our overall portfolio for moderate risk investors.

Jan. 2011 Bond Fund Selections

Specific Fund We Recommended (Fund Symbol) Percent of Portf.	1 Yr. Tot. Ret. vs (Category Average Tot. Ret.)	Performance Advantage/Disadvantage For Our Specific Fund
Vang. Tot. Bond Market (VBMFX) 12.5%	+7.6% (+9.8%)	-2.2%
PIMCO Total Return Instit (PTTRX) 45% or	+4.2 (+6.2)	-2.0
Harbor Bond Fund (HABDX)	+3.5 (+6.2)	-2.7
Vang. Interm. Term Tax-Exempt (VWITX) 7.5%	9.6 (+8.5)	+1.1
PIMCO Real Return Instit (PRRIX) 10% or	+11.6 (NA) (See Note)	NA
Harbor Real Return (HARRX)	+11.3 (NA) (See Note)	NA
Vang. ST Investment Gr. (VFSTX) 5%	+1.9 (+2.0)	-0.1
Vang. LT Investment Gr. (VWESX) 5%	+17.2 (+7.1)	+10.1
Vang. Hi Yield (VWEHX) 15%	+7.1 (+2.8)	+4.3

Note: There is no available fund benchmark for inflation-protected bonds.

Jan. 2009 Stock Fund Selections (3 Yrs. Ago)

Specific Fund We Recommended (Fund Symbol) Percent of Portf.	1 Yr. Tot. Ret. vs (Category Average Tot. Ret.)	Performance Advantage/Disadvantage For Our Specific Fund
Vanguard Growth Idx (VIGRX) 22.5%	+17.5% (+15.4%)	+2.1%
Vang. 500 Idx (VFINX) 27.5%	+14.0 (+12.7)	+1.3
Vang. Equity Income (VEIPX) 7.5%	+14.2 (+10.8)	+3.4
Vang. Small Cap Idx (NAESX) 7.5%	+19.1 (+16.7)	+3.4
Vang. Internat. Gr. (VWIGX) 20%	+12.2 (+8.4)	+3.8
Hussman Strategic Growth (HSGFX) 7.5	+0.8 (+8.3)	-7.5
Vang. Pacific St. Idx (VPACX) 7.5%	+6.5 (10.3)	-3.8

Our specific Stock Portfolio funds using the percentage allocations we recommended, if bought and held over the full 3 years returned 13.3% annualized, vs the S&P 500 Index which returned 14.1%.

Jan. 2007 Stock Fund Selections (5 Yrs. Ago)

Specific Fund We Recommended (Fund Symbol) Percent of Portf.	1 Yr. Tot. Ret. vs (Category Average Tot. Ret.)	Performance Advantage/Disadvantage For Our Specific Fund
Vang. Growth & Inc (VQNPX) 27.5% or	-1.7% (-0.9)	-0.8%
Vang. 500 Idx (VFINX)	-0.3 (-0.9)	+0.6
Vang. Internat. Gr. (VWIGX) 27.5%	-2.0 (-4.4)	+2.4
MainStay ICAP Equity (ICAEX) 17.5%	-0.4 (-2.7)	+2.3
Vang. Mid-Cap Idx. (VIMSX) 12.5%	+1.2 (+1.1)	+0.1
Vang. Pacific St. Idx (VPACX) 7.5%	-3.7 (-0.3)	-3.4
Vang. Morgan Growth (VMRGX) 7.5%	+0.5 (+1.0)	-0.5

Our specific Stock Portfolio funds using the percentage allocations we recommended, if bought and held over the full 5 years returned -1.2% annualized, vs the S&P 500 Index which returned -0.3%.