The first Friday of October has arrived and it's time to open our Summer Hiatus Portfolio. Yes, I'm going to buy the top 20 stocks ranked by VST descending as of today's close and hold them until the first Friday in July 2008. However, I will limit the number of stocks in the portfolio to two per Business Sector. Long-term VectorVest users may observe that this strategy is much simpler than the one I described in my June 16, 2006 essay called, "My Game Plan."

There's a long history behind the Summer Hiatus portfolio strategy which I won't go into at this time. However, the essence of this strategy is simple: you want to own stocks that are quite likely to go up in price over time, but you don't want to be in the market during the three worst performing months of the year, July, August and September. For those readers who want more details behind this strategy, please read my essays of 06/09/06, 06/16/06, 10/06/06 and 07/13/07.

The money making potential of the Summer Hiatus Strategy rests upon the body of evidence we have obtained showing that high VST-Vector stocks go up over time. Tens of thousands of 5, 10, 15, 20 and up to 50 stock portfolios have been tested for various holding periods and showed profits virtually all the time. Our latest tests showed that portfolios of the top 20 stocks ranked by VST-Vector have gone up 99.46% of the time when held at least one year. The average annual return of 2,611 portfolios was 18.35%. Only 14 portfolios failed to show a profit.

An interesting thing about these top 20 VST portfolios is that the longer one holds them, the more they go up. It's also worth noting that top 20 VST portfolios also work well for VectorVest Canada, VectorVest UK, VectorVest Europe and VectorVest Australia.

Just to be sure, however, everyone should remember that risk is always involved when investing in stocks. While there is no trading involved in managing a Summer Hiatus portfolio, it wasn't easy for me to do. I had a hard time sitting still while a stock like AXR went from $60 to $150; then crashed and burned. Yes, I made some money, only 3.70%, with Summer Hiatus - 2006, but that was my fault. I tried to outsmart the system and paid for the experience. Had I used the strategy of buying the top 20 VST stocks with a maximum of two per Business Sector last year, I would have gained over 18%. Having learned my lesson, I expect to make more money with Summer Hiatus - 2007.

P.S. Visit the VectorVest University to learn more about the "Summer Hiatus" strategy. You will be amazed to see how well it performed through both Bull and Bear markets.