The Jubak’s Picks, my 12-18 month portfolio, returned 11.6% in the second quarter of 2009. Not shabby for a portfolio almost 50% in cash when the period began. When stocks are plunging, holding cash limits your losses. When stocks are rallying—and the 40% gain on the Standard & Poor’s 500 Stock Index from March 7 to June 12 sure counts as a rally—cash is an anchor holding down returns. So with half the portfolio in cash as I tried to limit the risk in my portfolio, you’d certainly expect the portfolio to trail the indexes. But the returns weren’t nearly as bad as you’d think for a portfolio so heavily in cash. The 11.6% return for Jubak Picks basically matched the 11% return for the Dow Jones Industrial Average for the quarter but trailed the 15% return for the S&P 500 and the 20% return for the NASDAQ Composite Index.

How did the portfolio come so close to the indexes while holding so much cash? Well, Jubak’s Picks positions in the hottest sectors during the rally scored big. Materials stocks were on fire during the rally and so were such picks in the sector as Thompson Creek Metals (TC), up 157%, Fortescue Metals (FSUMF), up 65%, and Yara International (YARIY), up 27%. Industrials soared and so did such picks as Maxwell Technologies (MXWL), up 99%, Middleby (MIDD), up 35%, and Deere (DE), up 22%.

Of course, the portfolio would have done even better if I’d owned more in the energy and financial sectors during the quarter. And my lack of exposure to the world’s emerging markets hurt too. In the quarter the Brazilian stock market climbed 41% in dollar terms; India was up 63%, and China rose 36.1%. But that’s what I gave up by holding so much cash in order to reduce my risk. (It also didn’t help that, thanks to a disagreement with MSN Money, Jubak’s Picks was sidelined without the ability to buy or sell, from May 12 through the July launch of this blog.)

For the year, though, a play-it-safer strategy is ahead of two out of the three major market indexes. The year to date return for 2009 on Jubak’s Picks of 7% beats the 1.8% gain on the S&P 500 and the 3.8% loss for the Dow Industrials. My year-to-date performance does trail the 16% return for the NASDAQ Composite for the year.

Longer term Jubak’s Picks is down 5% for the three years that ended on June 30, 2009 (versus a 24% loss for the Dow Industrials, a 29% loss for the S&P 500, and a 15% loss for the NASDAQ). Looking back five years, Jubak’s Picks is solidly in the black with a return of 58%  (versus a 19% loss for the Dow, a 19% loss for the S&P, and a 10% loss of the NASDAQ). At 10 years, the return on Jubak’s Picks is 89% (versus a 26% loss for the Dow, a 36% loss of the S&P, and a 33% loss for the NASDAQ). Since inception on May 7, 1997, Jubak’s Picks is up a cumulative 239% (versus a 15% return for the Dow, an 11% return for the S&P, and a 38% return for the NASDAQ).

A final but very preliminary word on the performance of The Jubak Picks 50 portfolio I started tracking on December 30, 2008. The six month return on that portfolio based on my 2008 book, The Jubak Picks:  50 Stocks That Will Rebuild Your Wealth and Safeguard Your Future, was 28%. Now, short term returns don’t mean much. It takes a good 10 years for a portfolio to really prove itself. Still, I’d rather start out 28% ahead than 28% behind. As they say, It’s better than a poke in the eye with a sharp stick.

You can follow both these portfolios in detail—including every buy and sell and those oh-so-meaningless but oh-so-captivating short-term returns—by clicking on the appropriate portfolio tab on the top of this page.