(Harvest) Our Portfolio continues to meet its primary objective to outperform the broader market over the long-term with a concentrated sector focus.The Conquest Business Cycle Investing, MidCap Portfolio outperformed its benchmark during the 1st Quarter 2016, registering a 2.63% advance vs. a 1.35% uptick for the S&P 500 Composite and a 2.25% gain for the Russell Mid-Cap Index. It was an especially erratic period, characterised by sharp losses in January 2016, followed by minimal gains in February 2016 and healthier gains in March 2016.

Since inception in July 2010 through the end of March 2016, our BCI MidCap Portfolio has advanced 240%, compared to a 122% gain for the S&P 500 Composite and 125% for the Russell Mid-Cap Index during the same interval.

During the first quarter 2016, we continued to ramp up our cash position, which was increased to 10% from 7% since the end of December 2015. Our Hedging Activity also increased to 7.2% from 4.9% at the end of the fourth quarter 2015. Our concerns about over-valuations led us to scale back our Technology allocation to 16.8% from 22%, three months earlier. Additional reductions in our overall sector allocations were offset by an increase in our Cash Equitization to 3.5% at the end of the first quarter.

Faced with downward revisions in U.S. GDP estimates for in the foreseeable future, prospects for a continued tightening of Federal Reserve monetary policy and lackluster earnings expectations, we do not view current stock market valuations as sustainable.

Considering the macroeconomic factors previously mentioned, a sideways market pattern may be the best that can be hoped for while there is a rising possibility for a market retracement in the coming months.