Stock Market Metrics: Playing the Numbers

There are no infallible guides to stock market movements. However, that doesn't stop investors from using various measurements to try to divine the current and future direction of a stock's price or the equity markets as a whole. Here are some common methods (or metrics) for gauging the stock market. Gauging volatility The CBOE Volatility Index®, informally referred to as the VIX® and nicknamed "the fear index," measures real-time changes in the prices of a group of S&P 500 30-day options traded on the Chicago Board Options Exchange. When financial markets are stressed, prices of those options tend to rise as investors try to hedge any potential negative impact on their portfolios. The more concerned options traders are about potential instability, the higher the VIX tends to go; conversely, when fears subside, the VIX tends to be lower. How high is high for the VIX? During the worst of the 2008 financial crisis, it spiked to 89 at one point. Since then, it has gradually returned to more normal levels in the teens and twenties. Moving averages A moving average reflects a stock's average price or an index's value over a specified period of time (for example, the last 50 days). As a new average for the time period is calculated each day, the earliest day's data drops out of the average. The results are typically depicted as a line on a chart, which shows the direction in which that rolling average has been moving. For example, a stock's 50-day moving average (DMA) shows whether the stock's short-term price has been moving up or down; a 200 DMA smooths out shorter-term fluctuations by using the longer 200-day rolling time period. When a stock's price moves above its 50-day or 200-day average--two of the most popular gauges--technical analysts typically consider it a bullish signal that the stock or index has momentum. Conversely, when the price moves below its moving average, it's considered a bearish signal suggesting that any uptrend could be reversing. Golden cross/death cross When the short-term moving average of a stock or index rises above a longer-term average--for example, when the 50 DMA moves upward above its 200 DMA--the situation is referred to as a "golden cross." It shows that the stock's most recent price action has been increasingly positive, suggesting that investors have grown more bullish on the stock. Technical analysts also look for golden crosses with various stock indices--the S&P 500 is perhaps the most popular--to try to gauge the potential future direction of the equity markets. The so-called "death cross" is the inverse of a golden cross. It occurs when the 50 DMA falls below the 200-day, and is considered a bearish signal, especially when seen in a broad market index such as the S&P 500. Such signals may or may not be valid; there are arguments on both sides. However, many of the automated trading systems that are responsible for a large percentage of all transactions are guided at least in part by such perceived quantitative signals. As a result, an index or stock can experience volatility--either up or down--as it reaches either of these points. Fundamental metrics Other stock market metrics rely on the nuts and bolts of corporate operations that are reflected on a company's balance sheet--so-called "fundamental data." Though based on the operations of individual companies, they also can be aggregated and averaged to suggest the state of an overall stock market index comprised of those stocks. The following represent some frequently used fundamental stock metrics. Earnings per share (EPS): This represents the total amount earned on behalf of each share of a company's common stock (not all of which is necessarily distributed to stockholders). It is calculated by dividing the total earnings available to common stockholders by the number of shares outstanding. Price-earnings (P/E) ratio: This represents the amount investors are willing to pay for each dollar of a company's earnings. Calculated by dividing the share price by the EPS, it can be used to gauge investor confidence in the company's future. A ratio based on projected earnings for the next 12 months is a forward P/E; one based on the previous 12 months' earnings is a trailing P/E. Like EPS, P/E is considered an indicator of how expensive or cheap a stock is. Return on equity (ROE): This is a way to gauge how efficient a company is, especially when compared to its peers in the industry. This percentage compares a company's net income (usually for the last four quarters) to the total amount of shareholders' equity (typically, the difference between a company's total assets and its total liability). Debt/equity ratio: Obtained by dividing a company's total liability by all shareholder equity, this percentage suggests the extent to which the company relies on borrowing to finance its growth. Fundamental metrics based on the operations of individual companies also can be aggregated and averaged to suggest the state of an index comprised of those stocks. Broadridge Investor Communication Solutions, Inc. does not provide legal, taxation, or investment advice. All the content provided by Broadridge Investor Communication Solutions is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources. Copyright 2011 by Broadridge Investor Communication Solutions Inc. All Rights Reserved.

The Investment Policy Statement: A Portfolio's Road Map

In some cases, investors choose to authorize a money manager to make the actual investing decisions for their portfolio rather than simply make recommendations. In such cases, it can be valuable to have a mechanism for making sure in advance that investor and manager are on the same page. An investment policy statement (IPS) is designed to ensure that both sides understand the scope of the manager's decision-making authority and the guidelines on which investment decisions will be based. The portfolio's owner can take comfort in knowing that the investment manager has a clear sense of what's expected, while the manager can employ his or her best judgment and experience in following the IPS guidelines. An investment policy statement also can be used by an investment committee--for example, officials responsible for managing the assets of a nonprofit organization, pension fund, or university endowment--to spell out the policies underlying the committee's investment decisions. Such a statement can increase transparency and improve consistency in case of turnover in committee membership. Though an investment policy statement can be as simple or as complex as the parties involved want it to be, here are a few elements that are likely to appear. Roles and responsibilities An IPS generally spells out which accounts are covered by the policy statement and establishes procedures to be followed--for example, how subsequent modifications to the IPS itself will be handled. It also may set forth a process for ongoing monitoring of the portfolio, such as how often the investment manager will report on performance. In the case of an institutional investor, the IPS may specify who will be responsible for reviewing those reports and communicating with the investment manager, and which party is responsible for documenting compliance with any regulatory requirements. Investment objectives and/or philosophy An IPS generally will spell out the portfolio owner's goals and objectives. For example, it might state that the portfolio's primary goal is providing a certain level of income annually, or pursuing maximum growth; it also might specify how much volatility the owner is comfortable with. Such guidelines will affect the portfolio's asset allocation and the manager's selection of individual investments, though there obviously is no guarantee that a portfolio might not occasionally exceed the agreed-upon volatility guidelines or fail to achieve the desired goal. Asset allocation and criteria for investment selection Based on the above factors, an IPS may specify asset classes that are or are not appropriate for the portfolio. For example, it might allow investments in both individual bonds and bond funds, but exclude investments in the sovereign bonds of emerging markets. As a general rule, an IPS does not name specific securities for either inclusion or exclusion, permitting the manager to select individual securities within the approved asset classes. However, there may be exceptions--for example, when an investor already has a concentrated stock position. An investor who holds a large number of shares accumulated by exercising stock options granted as part of an employee compensation program might want to ensure that those holdings are not increased. An IPS may or may not spell out a general asset allocation for a portfolio or set targeted ranges for each permitted asset class; for example, it might permit a portfolio's allocation to equities to range from 50% to 70%. It also may specify how often or under what circumstances the portfolio will be rebalanced to maintain a targeted asset allocation; set liquidity and marketability requirements; outline any specific cash reserves needed; and encourage or prohibit tax management strategies. Criteria for gauging performance A portfolio that doesn't produce the return necessary to meet its owner's financial and legal obligations--for example, pension payments owed by a pension fund--has even bigger problems than a portfolio that falls short of providing the return hoped for by an individual owner. That's why an IPS will often include expected performance criteria, such as a targeted percentage return or a requirement that the portfolio's assets match or exceed the performance of one or more appropriate benchmark indices. As you can see, an IPS can be as detailed or as general as the parties involved feel is appropriate. Your financial professional can help you explore whether an IPS is appropriate for your individual situation. Even though an investment policy statement may target a desired return on the portfolio, that does not mean the portfolio will necessarily achieve that return. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

Broadridge Investor Communication Solutions, Inc. does not provide legal, taxation, or investment advice. All the content provided by Broadridge Investor Communication Solutions is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources. Copyright 2011 by Broadridge Investor Communication Solutions Inc. All Rights Reserved.

High-Income Individuals Face New Medicare Taxes in 2013 Two new Medicare-related taxes take effect in 2013: an additional 0.9% payroll tax on high-wage earners, and a 3.8% tax on the unearned income of high-income individuals. Here's what you need to know. New additional Medicare payroll tax Beginning in 2013, the employee share of the hospital insurance (HI), or Medicare, portion of the Federal Insurance Contributions Act (FICA) payroll tax will increase by 0.9% (from 1.45% to 2.35%) for high-wage earners. Will you be affected? The tax applies to the extent that your wages exceed $200,000 ($250,000 in combined wages if you're married and file a joint federal income tax return, $125,000 if you're married and file separately). So, in 2013, a single individual with wages of $230,000 will owe HI tax at a rate of 1.45% on the first $200,000 of wages, and HI tax at a rate of 2.35% on the remaining $30,000 of wages for the year. The additional tax doesn't apply to the employer portion of the FICA payroll tax, but your employer is responsible for withholding your portion of the tax--the additional 0.9% will be withheld on any wages you receive over $200,000. Your employer won't account for any wages earned by your spouse, so if you are married, you may owe more (or less) tax than the amount that's withheld. In that case, you will pay any additional tax due (or claim a refund for taxes overpaid) on your federal income tax return for the year. If you're self-employed, the additional 0.9% tax applies to self-employment income that exceeds the dollar amounts above (reduced, though, by any wages subject to FICA tax). If you're self-employed, you won't be able to deduct any portion of the additional tax. New tax on investment income Beginning in 2013, a new 3.8% Medicare contribution tax will generally be imposed on the unearned income of high-income individuals. The tax is equal to 3.8% of the lesser of: Your net investment income The amount of your modified adjusted gross income (basically, your adjusted gross income increased by an amount associated with any foreign earned income exclusion) that exceeds $200,000 ($250,000 if married filing a joint federal income tax return, $125,000 if married filing a separate return) So, if you're single and have modified adjusted gross income of $250,000, consisting of $150,000 in earned income and $100,000 in net investment income, the 3.8% Medicare contribution tax will only apply to $50,000 of your investment income. What is "net investment income"? Net investment income generally includes all net income (income less any allowable associated deductions) from interest, dividends, capital gains, annuities, royalties, and rents. It also includes income from any business that's considered a passive activity, or any business that trades financial instruments or commodities. Net investment income does not include interest on tax-exempt bonds, or any gain from the sale of a principal residence that is excluded from income. Distributions you take from a qualified retirement plan, IRA, IRC Section 457(b) deferred compensation plan, or IRC Section 403(b) retirement plan are also not included in the definition of net investment income. Both taxes can apply If you have high wages and investment income, you could be subject to both the 0.9% additional HI payroll tax and the 3.8% Medicare contribution tax on your investment income. So, you'll want to be sure to account for them in your overall tax plan.

Broadridge Investor Communication Solutions, Inc. does not provide legal, taxation, or investment advice. All the content provided by Broadridge Investor Communication Solutions is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources. Copyright 2011 by Broadridge Investor Communication Solutions Inc. All Rights Reserved.

Resolutions & Taxes

9785 Towne Centre Drive

San Diego, CA 92121-1968

75 State Street, 24th Floor

Boston, MA 02109-1827

January 3, 2013

Dear Valued Investor:

Instead of champagne toasts and party hats, Washington, DC chimed in the New Year with the same old dance of waiting until the last minute before demonstrating its near inability to work together.

Regardless, the so-called fiscal cliff, a series of economically devastating tax increases and spending cuts that were due to come on line at the start of 2013, was temporarily averted given a last-second deal between the Republican-led House of Representatives and the Democratic-led Senate. The compromise, known as the American Taxpayer Relief Act of 2012, is not the grand solution to address our nation’s surging debt issues that many had hoped for. Rather, it is more of a temporary band-aid that resolved the revenue (tax) elements of the fiscal cliff, but delayed addressing the tougher decisions surrounding spending cuts and raising the debt ceiling until February 2013. Specifically, the Act contains the following major provisions:

1. Individual income taxes:
2. The Bush tax cuts are permanently extended for individuals with taxable income less than $400,000 ($450,000 for married couples), and the alternative minimum tax patch is made permanent and indexed for inflation.
3. Capital gains and dividends:
4. There is no difference on tax rates for capital gains and dividends, although top rates will rise to 20% for individuals with taxable income greater than $400,000 ($450,000 for married couples).
5. Personal exemption reductions:
6. Reinstated were limitations on itemized deductions and personal exemptions for taxpayers with taxable incomes greater than $250,000 ($300,000 for married couples).
7. Estate tax:
8. The estate tax rate will move up to 40%, but the exemption will remain at $5 million, annually indexed for inflation (which is $5.12 million beginning January 1, 2013).
9. Unemployment benefits:
10. Extended unemployment benefits will be funded for another year.

The bottom line is that the federal income tax rate will remain the same for everyone except those individuals with taxable income greater than $400,000 ($450,000 for married couples), which is a change that will affect less than 1% of Americans. However, despite the headline that tax rates remain the same for most, the actual dollar amount of taxes paid will be moving higher for virtually every wage earner due to the elimination of the payroll tax cuts of 2011 and 2012. Payroll taxes help to fund Social Security by taxing 12.4% on wages up to $113,700 (in 2013), which was paid equally by employers and workers at 6.2% each prior to 2011. In 2011 and again in 2012, the President and Congress reduced the share paid by workers from 6.2% to 4.2%, which essentially put extra money via a tax cut in wage earners’ wallets. However, starting in 2013, the split will once again revert to 50/50 and result in higher taxes for essentially everyone. To put this in dollar terms, the Tax Policy Center estimates that households making between $100,000 and $200,000 will see an average tax increase of $1,784 in 2013. For higher income earners, the tax burden is much steeper given the combination of higher federal income tax rates, the elimination of payroll tax cuts, the limitation of personal deductions, and the higher tax rate on investment income.

Member FINRA/SIPC

page 1 of 2

In aggregate, Congressional Budget Office analysis estimates that the tax increases and small spending adjustments outlined in the American Taxpayer Relief Act of 2012 will essentially result in $230 billion less available for spending in 2013. This would result in a drag on the economy in 2013 totaling about 1.5% of gross domestic product (GDP). This growth "anchor" of 1.5% is sizable considering the anemic economic growth in the United States of approximately 2% — but, is considerably less than the 3.5% drag that an unaddressed fiscal cliff would have generated.

All eyes now shift from the cliff to the ceiling. Despite averting the steep cliff, the United States’ limit on how much debt can be issued, known as the debt ceiling — along with the sequestered spending cuts and the funding for the government — all need to be addressed by late February, which means the next fiscal battle is less than two months away. The good news is that there may finally be clarity around future tax policy, which could trigger some consumer and business spending that has been on hold during this time of uncertainty. Additionally, markets do not handle uncertainty well and hopefully having some of these items addressed will allow them to move in an upward direction in the near term. However, there remains much work to be done in the coming months to overcome the contentious policy decisions that Washington delayed addressing, instead of fixing, this past week.

At a time when Americans across this great country are committing to change through the annual rite of New Year’s resolutions, I only hope that our leaders in Washington commit to turn their characteristic procrastination into a quick resolution to the remaining cliff-related hurdles that await us in the coming months.

As always, if you have questions, I encourage you to contact your advisor.

Happy New Year,

Burt WhiteChief Investment Officer

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult me prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

More information on the American Taxpayer Relief Act of 2012 can be found at: http://www.gpo.gov/fdsys/pkg/BILLS-112hr8eas/pdf/BILLS-112hr8eas.pdf

This research material has been prepared by LPL Financial.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and makes no representation with respect to such entity.

Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value

Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit

Member FINRA/SIPC

RES 4015 0113

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Tracking #1-129516 (Exp. 01/14)

Is Your 529 Plan Making the Grade? As of June 2011, there were 8.8 million open 529 college savings plan accounts (Source: College Board, Trends in Student Aid, 2011). If you're one of the millions of parents or grandparents who've invested money in a 529 college savings plan, the arrival of a new academic year may be a good time to see how your plan stacks up against the competition. Mediocre investment returns, higher-than-average fees, limited investment options and flexibility--these are some of the things that might have you thinking you could do better with another plan. If you discover that your 529 plan's performance has been subpar, what options do you have? Roll over funds to a new 529 plan One option is to do a "same beneficiary rollover" to a different 529 plan. Under federal law, you can roll over the funds in your existing 529 plan to a different 529 plan (college savings plan or prepaid tuition plan) once every 12 months without having to change the beneficiary and without triggering a federal penalty. Of course, you'll need to research other plans and then choose one, which may take some time. Once you decide on a plan, the rollover process is fairly straightforward. Call your existing 529 plan manager to see what steps are required (some plans may impose a fee for a rollover, so make sure to ask); your new plan should have a system in place to accept rollover funds. You must complete the rollover within 60 days of receiving a distribution to avoid paying a penalty. If you want to roll over the funds in your 529 college savings plan account more than once in a 12-month period, you'll need to change the beneficiary to another qualifying family member to avoid paying a federal penalty. As a workaround, you can change the beneficiary back to the original person later. Change your investment strategy in your current 529 plan Just because you can switch to a different 529 plan doesn't necessarily mean you should. If the new plan has roughly the same mix of investment choices and similar fees as your current plan, you might ask yourself if you'd be better off staying put and simply changing your current investment allocations. This is especially true if you have invested in your own state's 529 plan and the availability of related state tax breaks depends on you remaining in a state plan. Section 529 college savings plans generally allow you to change the way your future contributions are invested at any time. So, for example, if you originally picked a more aggressive investment option, you can choose a different one (or more than one) for your future contributions. However, the rules are stricter when it comes to your existing contributions. If you're unhappy with the performance of your current investment portfolio but don't want to switch plans completely (using the rollover option described earlier), you may have another option. Specifically, 529 college savings plans are federally authorized (but not required) to let you change the investment option for your existing contributions once per calendar year without having to change the beneficiary. (This is different from a plan allowing you to pick a new investment option for your future contributions.) Before joining a 529 plan, check to see if it offers this flexibility for existing contributions. Other options to consider Some 529 college savings plan investors may wonder whether they should continue putting money into their accounts if their investment returns have been lackluster, or even in negative territory. Although more 529 plans nowadays are likely to offer more conservative investment options, such as certificates of deposit or money market funds, you still might decide that you'd like to have more control over your college investments. In that case, you might consider a Coverdell education savings account or an UTMA/UGMA custodial account, both of which let you choose your underlying investments. Finally, keep in mind that any college investment strategy should be reexamined periodically in light of new tax laws and changes in individual circumstances. A financial professional can help you understand your options, compare 529 plans, and select the right investment strategy for your situation. Note: Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. More information about specific 529 plans is available in each issuer's official statement, which should be read carefully before investing. Also, before investing, consider whether your state offers a 529 plan that provides residents with favorable state tax benefits. If you're one of the millions of parents or grandparents who've invested money in a 529 plan, the arrival of a new academic year may be a good time to see how your plan stacks up against the competition. Mediocre investment returns, higher-than-average fees, limited investment options and flexibility--these are some of the things that might have you thinking you could do better with another plan.

Broadridge Investor Communication Solutions, Inc. does not provide legal, taxation, or investment advice. All the content provided by Broadridge Investor Communication Solutions is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources. Copyright 2011 by Broadridge Investor Communication Solutions Inc. All Rights Reserved.

Healthy Personal Finance Resolutions for the New Year The new year is the time when many individuals start making resolutions to live a healthier lifestyle. And while resolving to eat better and exercise more is a good thing, you should be sure to make resolutions that pertain to the overall health of your personal finances as well. Develop a budget and stick with it A good way to start the year on the right track financially is to make sure that you have a budgeting system in place. Start by identifying your income and expenses. Next, add them up and compare the two totals to make sure you are spending less than you earn. If you find that your expenses outweigh your income, you'll need to make some adjustments to your budget plan (e.g., reduce discretionary spending). Once you have a budget, it's important to stick with it. And while straying from your budget from time to time is to be expected, there are some ways to help make working within your budget a bit easier: Make budgeting a part of your daily routine Be sure to build occasional rewards into your budget Evaluate your budget regularly and make changes if necessary Use budgeting software/smart phone applications Set financial goals or reprioritize current ones The new year is also a good time to set new financial goals and reprioritize your current ones. Take a look back at the financial goals you set for yourself last year--both short- and long-term. Perhaps you wanted to increase your cash reserve or save money for a down payment on a home. Maybe you wanted to invest more money towards your retirement. Did you accomplish any of your goals? If so, do you have any new goals that you would now like to achieve? Finally, have your personal or financial circumstances changed during the past year (e.g., marriage, a child, job promotion)? If so, would any of these changes warrant a reprioritization of some of your goals? Make sure your investment portfolio is still on target You'll also want to be sure to review your investment portfolio to ensure that it is still on target to help you achieve your financial goals for the upcoming year. To determine whether your investments are suitable for reaching your financial goals, you'll want to ask yourself the following questions: Do I still have the same time horizon for investing as I did last year? Has my tolerance for risk changed? Do I have an increased need for liquidity? Does any investment now represent too large (or too small) a part of my portfolio? Make it a priority to reduce debt Any healthy financial plan is one that makes reducing debt a priority. Whether it is debt from student loans, a mortgage, or credit cards, it is important to have a plan in place to pay down your debt load as quickly as possible. The following are some tips to help you manage your debt: Keep track of all of your credit card balances and be aware of interest rates and hidden fees Develop a plan to manage your payments so that you avoid late fees Optimize your repayments by paying off high-interest debt first or consider taking advantage of debt consolidation/refinancing programs Avoid charging more than you can pay off at the end of each billing cycle Review/take steps to improve your credit history Having good credit is an important part of any sound financial plan, and the new year is as good a time as any to check on your credit history. Your credit report contains information about your past and present credit transactions and is used by potential lenders to evaluate your creditworthiness. A positive credit history is important since it allows you to obtain credit when you need it and at a lower interest rate. Good credit is even sometimes viewed by employers as a prerequisite for employment. Review your credit report and check it for any inaccuracies. You'll also want to find out whether or not you need to take steps to improve your credit history. To establish a good track record with creditors, make sure that you always make your monthly bill payments on time. In addition, you should try to avoid having too many credit inquiries on your report (these are made every time you apply for a new credit card). You're entitled to a free copy of your credit report once a year from each of the three major credit reporting agencies. You can go to www.annualcreditreport.com for more information. The start of a new year may also be a good time to meet with a financial professional. A financial professional can help you: Determine your income, assets, and liabilities Identify financial goals Understand specific products/services Monitor your overall financial plan Adjust your plan if needed

Broadridge Investor Communication Solutions, Inc. does not provide legal, taxation, or investment advice. All the content provided by Broadridge Investor Communication Solutions is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources. Copyright 2011 by Broadridge Investor Communication Solutions Inc. All Rights Reserved.

Providing Perspective on the Markets and Economy

September 21, 2011

Dear Valued Investor:

Continued concern over the debt burden of the developed world combined with the deeply divided political landscape in Washington, D.C. has many investors questioning the sustainability of the economic recovery following the Great Recession of 2008. Growth has slowed and we believe the chance of revisiting a recession has increased to approximately 35%. However, the most likely scenario remains that global growth will continue at its modest pace, which could offer an upside surprise for an increasingly bearish-biased market.

While these volatile markets are sending many investors scrambling for a rock to hide under to wait out the uncertainty, I believe turning over those rocks in search of investment opportunities may prove fruitful over the long term. Fear and emotion oftentimes defines short-term market reactions. However, when fear is at its pinnacle, a patient temperament, faith in your investment plan, and a commitment to opportunistic investments can ultimately turn short-term market challenges into long-term investment success.

One does not have to go far into the history books to find two periods where short-term fear transitioned into investment triumphs. Today’s investment environment is causing investors to face similar challenges to those that haunted them in 2008 and again during the summer of 2010. In both of those periods, prices had declined further than their fundamental values and proactive policy action by central banks served as the catalyst to lure opportunistic investors back into the market. I believe that the same environment exists today and the same elixir is needed for these uncertain times.

The crowded trade certainly remains bearish, but policy actions to stoke the economic growth fire have begun again in earnest. The Federal Reserve Bank announced today that they will provide additional stimulative monetary policy through Operation Twist. Moreover, many central banks around the world that had been intentionally slowing their country’s growth in an attempt to head off inflation are now switching from the brake to the gas pedal to provide more stimulus to jump start growth and the stalling global economic recovery.

The market appears to be suffering much more from a lack of clarity and a wave of uncertainty than it is a degradation in economic fundamentals. While growth has undoubtedly slowed, most corporations are still on pace to post near-record third quarter profits, business spending continues to be strong, and retail sales remain positive. In fact, buoyed by surging auto production and sales following the disruption caused by Japan’s springtime natural disaster, economic growth this quarter for the United States may be poised to not only be the fastest of the year, but also to be faster than the first two quarters of the year combined.

Despite this modest and far from disastrous outlook, uncertainty has outweighed optimism and question marks have outpaced clarity. The market is essentially suffering from a recession of confidence. With the mood decidedly bearish, the market does not believe in this recovery and investors do not have faith that policy makers can avert the second recession in three years. But, it is fear and emotional disbelief that often serves as the catalysts to lower expectations—and stock prices—to levels that even market bears see the value of owning. While the market still faces a challenging environment and has a wall of worry to overcome, I believe that patience and a vigorous commitment to your investment plan is the best strategy to weather this bout of uncertainty and serve as yet another example of the resiliency of the markets, the global economy, and American business.

As always, I encourage you to contact your financial professional with any questions.

Sincerely,

Bob

Robert J. Carr III

38555 Mound Rd., Ste 200

Sterling Heights, MI 48310

(586) 979-2678

(586) 979-8550 Fax

(800) 788-1979 Toll Free

robert.carr@lpl.com

http://www.rjcarrwealth.com/

Securities Offered throught LPL Financial

Member FINRA/SIPC

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult me prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The Federal Open Market Committee action known as “Operation Twist” began in 1961. The intent was to flatten the yield curve in order to promote capital inflows and strengthen the dollar. The Fed utilized open market operations to shorten the maturity of public debt in the open market. The action has subsequently been reexamined in isolation and found to have been more effective than originally thought. As a result of this reappraisal, similar action has been suggested as an alternative to quantitative easing by central banks.

This research material has been prepared by LPL Financial.

Tracking #1-008605 | (Exp.09/12)

September 11: A Decade Later

September 12, 2011

Dear Valued Investor,

No one will ever forget where they were when the horror and disbelief of the events on September 11, 2001 unfolded. On an otherwise perfect late summer morning, the unimaginable materialized before our very eyes as the cloudless blue sky laid witness to the billowing black smoke of hate and the country was filled with cries of confusion, anger, and fear. America had lost its innocence, but not its pride, compassion, or resolve.

September 11 has become such an important thread within the fabric of America that it joins July 4 as one of the two most important days on the calendar that is simply referred to by its date. Both days shaped America in their own unique way and marked a new beginning for our country. More importantly, both 7/4 and 9/11 tested the country’s resolve and required perseverance to overcome never-before encountered obstacles—but ultimately, both led to the declaration of America’s pursuit for freedom, independence, and justice.

A decade later the healing continues—though we have a somewhat greater sense of closure since this anniversary closely follows the elimination of al Qaeda leader Osama Bin Laden on May 2, 2011. But even this heroic task by U.S. armed forces felt empty and hollow when lined up against the resurfaced painful memories of the unjustified losses of that September day. In addition, it was a reminder that senseless hate remains in the world and that our communities, markets, and country will continue to be tested. But, America is used to being tested and passing with flying colors. America is safer now than it was 10 years ago. In addition to stepped up security measures and increased counter-terrorism intelligence efforts, America is also safer because we all wear the scars of 9/11 to forever remind us how a nation of diverse beliefs can become united around a common purpose.

National Public Radio, on their website NPR.com, conducted a survey of Americans and asked them to share, in just one word, how they felt on 9/11/01 and now a decade later. Not surprisingly, words like “shocked,” “confused,” and “scared” topped the feelings of Americans on 9/11/01. Over the decade since that day, our nation has faced a difficult healing process that coincided with additional challenges, such as two severe recessions, a collapsing housing market, and a challenging employment environment. Nonetheless, a decade later while the memories remain vivid, the tone has changed. Words like “hopeful” and “proud” compose the list of feelings that Americans now associate with the aftermath of the 9/11 tragedies—perhaps it is this resilience and sense of optimism that can serve as the blueprint on how to navigate through the tough and unsettling economic times that we now face.

Make no doubt about it, September 11 will not be the last time hatred washes onto America’s shores nor will it be the last time America’s resolve is tested. These uncertain economic times are challenging this nation’s confidence and unity as we speak. Perhaps the tenth anniversary of the September 11 tragedies will mark more than just a tribute to the fallen, the mourning, and the brave. Just maybe, this great country will use this milestone to remember how a united nation came together to conquer uncertainty and fear a decade ago and use the same strategy to tackle today’s hurdles. If each business could find a way to hire just one extra worker, if the political divide in Washington could find a bit more compromise, and if the market could find the faith that the future of America is an investment worth making, I believe that our country, our communities, and our investment portfolios can overcome this latest challenge.

As always, I encourage you to contact me with any questions.

Sincerely,

Robert J. Carr III

RJ Carr III & Associates

38555 Mound Rd., Ste 200

Sterling Heights, MI 48310

(586) 979-2678

(586) 979-8550 Fax

(800) 788-1979 Toll Free

robert.carr@lpl.com

http://www.rjcarrwealth.com/ 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult me prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

This research material has been prepared by LPL Financial.

Tracking #1-005645 | (Exp.09/12)

Sun is Shining on Investors as 2010 Draws to a Close

The sun is shining on investors as 2010 draws to a close. The economy has shown signs of reaccelerating from the summer soft spot, the stock market has made new two-year highs, as measured by the S&P 500 (returning to the level that preceded the September 2008 failure of Lehman Brothers), and the President signed into law a bill that extends all of the Bush tax cuts for two years, cuts payroll taxes, and expands jobless benefits.

The end of 2010 also seems to be setting the stage for the return of diversification. In 2008 and 2009, most markets moved together as the outlook for all financial assets was tightly linked to the global financial crisis and then to the recovery. During 2010, glimmers of the impending return of diversification became evident as markets began to behave more independently of each other. In May and June, as stocks and commodities asset classes fell, bonds steadily rose in value. And, inversely, in November and December, as stocks and commodities asset classes surged, bonds fell. A key potential benefit of having the investments in your portfolio behave differently is that it should serve to mute volatility, which is especially valuable when taking distributions from a portfolio. The return of the effectiveness of this important investment risk management tool is a welcome gift as investors look toward 2011.

However, the horizon for investors is not brightening everywhere. One area with a cloudy outlook is municipal bonds. The fiscal challenges facing U.S. states are serious and need to continue to be addressed in the coming years. However, we do not expect a stormy environment akin to the solvency troubles that plagued Europe in 2010. The state debt issues are different than those troubles in Europe in two main regards:

·         First, the magnitude of the problem facing some European nations is much greater. For example, the budget deficit-to-GDP ratio for some of the most troubled states, such as California, New York, and Florida, average about 1%, while European nations like Greece, Portugal, Ireland, and Spain average about 10%. Additionally, the total debt-to-GDP ratio for these same states average about 20% when including the states’ unfunded pension liabilities while those of the European nations are much higher at around 100%.

·         Second, the ownership of the respective bond markets is very different. Banks in the U.S. do not own much domestic municipal government debt while European banks own a lot of European government debt, which has magnified the problems overseas relative to those of the states.

No stormy skies or bright sunshine for 2011, we see a more middle of the road forecast, composed of a mix of clouds and sun. Recent years have seen extremes one way or the other and we see a 2011 that offers investors modest single-digit gains for stocks, low-to-mid single-digit gains for bonds, and an economy in the United States that muddles along at a 2.5 to 3% pace. As always, I encourage you to contact me if you have any questions.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not ensure against market risk.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternative minimum tax. Federally tax-free but other state and local taxes may apply.

This research material has been prepared by LPL Financial.

The LPL Financial family of affiliated companies includes LPL Financial and UVEST Financial Services Group, Inc., each of which is a member of FINRA/SIPC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and make no representation with respect to such entity.

Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit Member FINRA/SIPC

Tracking #692722 | (Exp. 12/11)

Washington and Markets

November 12, 2010

Dear Valued Investor:

Market participants breathed a sigh of relief in early November. The arrival of the long-awaited mid-term elections and the Federal Reserve (Fed) announcement of another stimulus program unfolded as anticipated.
Even though the major political headlines are out of the way, what happens in Washington during the remainder of the year will still hold influence over the markets. The most important item facing Congress is the looming expiration of the Bush tax cuts. Congress is likely to address the tax cuts in some way during the remainder of this year. Both parties risk a huge backlash if no action is taken and all tax rates revert to higher levels, which puts pressure on the 70% of the economy that is driven by consumer spending. Congress is likely to pass a one- or two-year extension of all the Bush tax cuts during the lame duck session, but it is a close call.

The market reacted favorably to election results and the Fed announcement, extending the trends in the markets and resulting in the S&P 500 reaching a new two-year high. However, the strong gains in September, October, and November were not powered by individual investors. For the first time in 25 years, a three-month gain in the S&P 500 of 10% or more was not accompanied by net inflows into individual investments — namely U.S. equity mutual funds and exchange-traded funds (ETFs). Fortunately, individual investor outflows have been more than offset by the buying of institutions and foreign investors. Nonetheless, individual investors have been net sellers of U.S. stock mutual funds every month since April of this year. In that time, they have pulled about $80 billion from the U.S. stock market*. This is not because individual investors have been avoiding investing entirely, however. Interestingly, they have been putting money to work in foreign stocks and U.S. bonds—including more aggressive emerging market stocks and high-yield bonds, as they reallocate money from cash and U.S. stocks.

Investors’ appetite for yield has prompted strong inflows into the high-yield bond market this year*. The potential for extending the dividend tax rate at 15% (as opposed to reverting up to 39.6% for the top bracket), combined with the increases in dividend payments that traditionally come in the first several months of the year, may prompt individual investors to migrate from high-yield bonds toward high dividend-paying stocks furthering the stock market’s gains. This upside potential is balanced by the threat of potential selling by foreign investors prompted by the ongoing weakness in the dollar. As a result, the volatility that has been the key characteristic of this year’s stock market performance is likely to continue in to 2011. As always, we encourage you to contact your financial professional if you have any questions.

Best regards,
Jeffrey Kleintop, CFAChief Market Strategist
LPL Financial

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Member FINRA/SIPC* Source: Investment Company Institute
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price.
High-Yield/Junk Bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors.
International and emerging market investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
Asset allocation does not ensure a profit or protect against loss.
Stock investing involves risk including loss of principal.
This research material has been prepared by LPL Financial.
The LPL Financial family of affiliated companies includes LPL Financial and UVEST Financial Services Group, Inc., each of which is a member of FINRA/SIPC.

Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value

Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit

Member FINRA/SIPC

One and A Half Cents on the 4th Quarter

October 15, 2010

Dear Valued Client:

As the calendar turned to fall, the markets began to rise. While bonds posted a respectable 2.5% gain for the third quarter, measured by the Barclays Aggregate Bond index, the S&P 500 posted an outstanding 11% gain for the third quarter. This performance was driven by an unusually strong September. The gains during the quarter were far from steady. Volatility was high as the S&P 500 moved up and down—and up again—within a 10% trading range during much of the quarter. Despite the strong gains in September, the stock market ended the third quarter not far from where it began the year.

Investors may also look forward to the market posting gains by year-end as key drivers combine to lift stocks out of their third quarter trading range. Here is my “one-and-a-half cents” worth of insight on the potential positives investors are likely to see during October:

·         A one and a half (not double) dip for the economy. Slow, but positive economic growth is likely to support modest stock market gains in the fourth quarter.

·         One and a half chambers of Congress go to the Republican Party (GOP) in the mid-term election. The GOP is likely to take the majority in the House and will hold about half of the Senate. The return of political balance in Washington between the parties may slow the pace of legislative change and result in the “gridlock” the market has historically favored. In addition, depending on the outcome of the election, it is possible PAYGO (Pay-As-You-Go) rules that require budget offsets to any tax cuts are waived allowing the extension of many, if not all, of the Bush tax cuts into 2011.

·         “QE Version 1.5” from the Fed. At the Federal Reserve meeting on November 3, 2010 the Fed is likely to announce additional stimulus measures to improve economic growth. The coming bond purchases may be half the size of quantitative (QE) version 1 (the first round of QE the Fed enacted during 2008 and 2009).

Finally, the fourth quarter of mid-term election years is almost always favorable for stocks. The market’s reaction to mid-term elections, as uncertainty fades, has almost always been positive, with fourth quarter gains as measured by the S&P 500 index averaging 8% in mid-term election years. The only two exceptions to the gains in the fourth quarter of every mid-term election year since 1950 were 1978 and 1994, when the Fed was hiking rates aggressively, a critical factor that is highly unlikely to take place this quarter. So far, stock market performance in 2010 has tracked the typical pattern for U.S. stocks in mid-term election years, albeit with a bit more than the usual volatility.

The volatility that has been the key characteristic of this year’s stock market performance is likely to continue but should present opportunities for those investors patient enough to ride the market’s ups and downs.

Best regards,

Jeff Kleintop, Chief Market Strategist, LPL Financial

IMPORTANT DISCLOSURES

This research material has been prepared by LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual. To determine which investments may be appropriate for you, consult me prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

Quantitative Easing (QE) is a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity. 

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Stock investing may involve risk including loss of principal.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This Barclays Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.

The LPL Financial family of affiliated companies includes LPL Financial and UVEST Financial Services Group, Inc., each of which is a member of FINRA/SIPC.

Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit

LPL Financial, Member FINRA/SIPC