The BL-SH strategy consists of the following four elements:

• Mr. Sobel has developed a proprietary computer program (the Program) which ensures a consistent and objective standard for what type of portfolio to utilize within the equity markets. This model allows BL-SH to take strategic advantage of intermediate and long term disequilibrium in the market, when it occurs, by the use of "correlation theory."

 

• During times the Program indicates that the equity markets are either correctly priced or over-priced, clients are invested in a set of mutual funds that have a low correlation to each other and a low correlation to the larger stock market in general. This set is intended to protect investors from suffering the full effects of a market downturn. The risk threshold is rigorous, typically resulting in volatility factors at significant discounts from the Standard & Poor 500 averages.

 

• At those times the Program indicates an advantageous disequilibrium in the market, a second portfolio is employed; one which is designed to take advantage of the next rebound.

 

• It has been demonstrated that, over time, the vast majority of investment return is due to allocation as opposed to individual issue selection. Therefore, diversification is a key element in the strategy and is achieved by investing in select mutual funds, usually those with no load or low load charges.

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