Welcome to AlphaStream Portfolios
A different mindset for investing!

Lean back and close your eyes for a moment – and think of the last time you heard a truly different message, a different mindset if you will, about investing in the stock market. Sure, all the new hedge funds, derivatives, leverage or other complex investments create synthetic equity products to gain performance. But, isn't the focus of the message still the same – return, return, return?

Stop and ask yourself – what is the probability of those complex investment strategies reaching their objective????

It is one thing to advocate a return to meet objectives, but it is far more important to know your odds of getting there. A great return doesn't help much if it seldom occurs. Here is a case in point that we recently highlighted in our August 2006 commentary:

An article in Investment Advisor magazine recently pointed out a Standard & Poor's study that showed very few mutual funds were able to maintain top half or top decile performance. Look at these examples of funds biased toward market capitalization:

"Over five-years ending June 30, 2006:

• 58 (10.8%) large-cap funds
• 12 (7.9%) mid-cap funds and
• 19 (7.7%) small-cap funds

S&P found a total of

• three large-cap funds (1.12%)
• zero mid-cap funds and
• one small-cap fund (0.81%)

Not very impressive, is it? So it is no surprise that whatever you hear or read in the financial media is typically targeted to one aspect of your investment psychology – the desire to make money. Is it any wonder they don't bother to suggest how often that success might occur?

Investigate AlphaStream Portfolios – a different mindset for investing!

Rather than return being your motive for success, we find it to be more advantageous to focus on the probability of an objective being repeatedly achieved. Performance then becomes the end result, not the motive. This helps to maintain the proper perspective when faced with important investment decisions.

It may be for ease or for instant gratification, but stock market investors of all sophistication often measure their portfolio's success against a popular and widely-followed index like the S&P 500. This easy snapshot comparison has the potential to infatuate the mind with an image of desired return without due consideration as to how that objective might be attained with regularity.

If your chosen investment system simply beat the S&P 500 by ANY amount on a regular basis, then the math of compounding excess return works in your favor. If you are able to reduce the volatility of your equity portfolio in down markets (semi-standard deviation) and experience positive volatility in up markets (standard deviation), then once again the effect of compounding return works very much in your favor.

The new AlphaStream™ mindset is intended to remove non-compensatory risk from your investment process by realigning your investment focus away from those subjective biases and decisions that may be holding back your investment potential.

Intrigued? Click here to see how the probabilities of success might work in your favor.

All the best for future investment success,

Robert S. McWilliams, Jr.
Founder and President