In September, our Conservative portfolio was up 3.7% while our Aggressive portfolio was up 6.5%. This compares to an 8.92% return on the Vanguard 500 (VFINX) fund and a -0.01% return for the Vanguard Total Bond Index (VBMFX).

The strongest stock categories in September where technology funds, which gained 13%, and small cap growth, up 12.8%. Japan, utilities, and real estate posted more modest gains, up 7%, 4.7%, and 4.4% respectively. Strong bond areas included emerging market bond funds, up 3.2% and high yield (junk) bonds, up 2.9%.

Good Month:

• Our Large cap growth fund PRIMECAP Odyssey Growth (POGRX) soared 12.54% in September, beating the S&P 500 index fund by 3.6%
• Small cap growth Janus Triton T (JATTX) shot up 12.32% in September, outpacing S&P 500 index fund by 3.4%
• Europe fund Vanguard European ETF (VGK) scored another big month with a 11.26% jump in September.
• Blend fund Jensen Value J (JNVSX) did well for a relatively conservative fund with a 11.21% return last month.
• International diversified fund UMB Scout Worldwide (UMBWX) also posted a big return, up 10.61% in September partially on US dollar weakness.
• Sector: financial services fund Royce Financial Services Fund (RYFSX) also moved sharply higher last month, up 10.27% in September.
• Mortgage bond fund Doubleline Total Return Bond (DLTNX) climbed 1.78% in September, 1.8% better than the bond market index. Higher risk bonds in general are on an upswing.

Bad Month:

• Our Long/Short fund PowerShares DB Commodity Dble (DEE) sank -13.87% in September, worse than the S&P 500 index fund by a whopping -22.8%. We fully expect this fund to perform poorly when stocks are doing well, unless the commodity crash starts anew. This small stake (just 2% of the Aggressive portfolio) is primarily a hedge against economic calamity and a speculation on commodities cooling.
• Utilities fund American Century Utility Income (BULIX) rose 5.54% in September, 3.4% worse than the S&P 500 index, after a strong run since we added it a few months ago.
• Our blend fund Parnassus Equity Income (PRBLX) rose 8.52% in September, which underperformed the S&P 500 index fund by 0.4%.
• Our Government bond fund American Century Government Bond (CPTNX) slipped 0.12% last month as investors favored corporate and higher risk debt in September.