Portfolio, July 27, 2012

S&P 500: 1375 (97.8%)

Portfolio: $502,800 (100.6%)

XBI      1800 shares    $168,371

XLP    4700 shares    $167,223

IYZ      7070 shares    $165932

Cash                            $1250

Notes: Although the portfolio is still outperforming the market by a few percent, it is significantly hampered by being in cash the last day and a half during rebalancing the portfolio.  In that time, the S&P 500 went up almost 3%, erasing much of the advantage the portfolio gained over the index.  Had the portfolio not been sold, it  would have been up an additional 3%, outperforming the index by 5.8% rather than the 2.8% advantage the portfolio currently holds.
Although this was not the intent, this illustrates the hazard in being out of the market for a day or so while previous sales clear and cash becomes available, and illustrates the value of brokers who allow purchases to be made before proceeds from previous sales have settled, or trading in ETFs rather than traditional mutual funds.