Gravity Investments Completes Successful Stress Test of True Diversification(TM) Optimization System

DENVER, CO--(Marketwire - June 10, 2009) - Gravity Investments (Gravity), a premier financial engineering firm responsible for the Gsphere visual asset allocation platform, has announced the results of a series of tests designed to measure the impact of diversification on investment returns.

The tests, conducted using the Standard & Poor's 500 Index, showed that using Gravity's True Diversification™ to optimally diversify holdings consistently outperformed the underlying index in either its capitalization- or equally-weighted forms. In aggregate, True Diversification™ outperformed the alternatives by 327 basis points.

"It's easy enough for a rational investor to infer that a more diversified portfolio is preferable to a less diversified portfolio," said James Damschroder, Founder of Gravity Investments and inventor of the Gsphere process. "Now we know that diversification, at least the way we conceive it, is actually a primary enabler of achieving higher returns."

The performance tests, made using the firm's patented Gsphere Diversification Platform, produced one-, two-, three-, five-, and ten-year returns, each ending December 31, 2008. In head-to-head tests, diversification optimization outperformed the index in 40 out of 40 performance calculations. When extended into comparisons to an equally weighted S&P index, True Diversification™ produced positive gains in 39 of 40 comparison tests.

In the average of all the tests, True Diversification™ outperformed the market capitalization weighting method by an average of 462 basis points of annual performance. Outperformance versus the equally weighted index was 192 basis points. Across the 40 tests, True Diversification's greatest performance gain was 797 basis points and the lowest was a deficit of 37 basis points (the single losing test).

"While the primary objective of diversification optimization is really to protect against the downside, this research shows that True Diversification™ still adds to the upside," says Damschroder. "It's hard to argue the logic of the approach."

Gsphere, Gravity's three-dimensional diversification platform, is an optimization and analytic suite that bridges advanced optimization with sales and marketing accents. Central to the methodology is the notion of what Gravity calls "holistic portfolio visualization." The firm's innovative approach will benefit virtually every sponsor of investment product, including broker/dealers, RIAs, insurance companies, mutual fund companies, hedge funds, pension plans, bank trust groups, 401(k) providers, fund consultants, family offices, foundations, and endowments.

About Gravity Investments

Gravity Investments, the worldwide leader in Diversification Intelligence, is a leader in financial engineering and investment technology. A Denver-based firm, Gravity's Gsphere Portfolio Analysis Platform bridges the gap between traditional asset allocation and diversification optimization, providing clients an unparalleled ability to manage and market investments. For more information on Gravity Investments please visit www.gravityinvestments.com or call 866-373-8489.

Contact Information: Contact: Morrison Shafroth CSG|PR (720) 470-3653