Baystate Wealth Management Tactical Indicators Tactical IndicatorsBaystate Wealth Outlook EarningsNet downgrades for global equities, fears around economic growth. ValuationsCheaper valuations historically lead to higher returns. LiquidityIncreasing fear around willingness to lend remains a concern. Interest RatesLow rates should continue to support growth. SentimentInvestor sentiment has turned bullish. TechnicalThe market has resistance at the 200 Day Moving Average. OtherGlobal economic data surprising to the upside since August lows. Positive Neutral Negative Analysts and investors have become more defensive in their earnings expectations. Globally, consensus estimates for earnings on the MSCI ACWI have seen a net revision of -6.9%. It is apparent that after a strong earnings season for Q3, investors are nervous about the shakeout from the ongoing EU credit crisis. The current 12 month forward P/E ratio on the MSCI ACWI stands at 10.7x, well below historic average and well under its 5 year high of 15. Domestically the P/E ratio on the S&P 500 stands at 12.5x versus the 15-year average of roughly 17x. The TED Spread, representing the spread between short-term treasuries and 3 month LIBOR, stands at bps, up from its 7/29/11 value of The trend is upward, and this fear indicator is up over 210% year-to-date. Higher values indicate a higher level of fear in terms of willingness to lend (credit risk). The current rate on the 10 year US treasury bond is 1.85%, flirting with the lows investors saw back in September. The current rates are well off both the 3.3% yield at the start of the year and the 50 year average of 6.5%. The S&P 500 has not broken through its 200 day MA since November 11th. As a longer term trend line investors would like to see some market support to break through this barrier into positive territory. Earnings: Valuations: Liquidity: Interest Rates: Sentiment: Technical: Other: as of December 15, 2011 The current reading on the Citigroup Economic Surprise Index is +32 (scale = +100 to -100) showing an increase in positive news, as the index has bounced well off its 12-month low of seen back in August. The global economic diffusion index measures the number of surprises in global economic data versus expectations within the G-10 countries. Positive readings display positive surprises (above expectations), while negative readings show negative surprises versus expectations. The trend is showing an improvement versus the high number of negative economic surprises we saw in August. The spread between bullish and bearish sentiment on both the Association of Individual Investors and the Investors Intelligence surveys are both positive at +6.6% and +14.8% respectively. Bullish sentiment can be a contrarian indicator for stock markets.

Disclaimer This report contains the opinions and views of John Cogswell and Josh Pierce. While John Cogswell and Josh Pierce are employees of Baystate Wealth Management, the views and opinions expressed herein are their own, and do not necessarily represent the views and opinions of any other employee or representative of Baystate Wealth Management. This report is not intended to provide investment advice and no one should rely on the views and opinions expressed herein in making investment decisions. All recipients and readers of this Report must consult with and rely on their own investment professionals in making investment decisions or when buying or selling securities of any type. Standard & Poor’s 500® consists of 500 US stocks chosen for market size, liquidity, and industry group representation. It is a market- value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. You cannot invest directly in an index. The MSCI EAFE Index® is recognized as the pre-eminent benchmark in the United States to measure international equity performance. It comprises 21 MSCI country indices, representing the developed markets outside of North America: Europe, Australasia and the Far East. You cannot invest directly in an index. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 90% of the U.S. market. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 8% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap Index is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap Index represents approximately 27% of the total market capitalization of the Russell 1000 companies. Past performance is not a guarantee or indication of future results. Investments fluctuate in value based on changes in market conditions and other factors such that there is a risk of loss. Baystate Wealth Management is a Registered Investment Advisor located at 200 Clarendon St, 19th Floor,BOSTON,MA Submission #577566