LPL Financial Member FINRA/SIPC 1 Member FINRA/SIPC PRESENTER NAME DATE December 9, 2014

LPL Financial Member FINRA/SIPC 2  The U.S. economy continues its transition from the slow gross domestic product (GDP) growth of 2011 – 2013 to more sustained, broad-based growth.  Central banks around the world will also be on the move in  Washington shifts from a relatively quiet 2014 to take a bigger role in 2015.

LPL Financial Member FINRA/SIPC 3  Stock prices in 2015 may potentially record their seventh consecutive year of positive returns.  Global central bank policies will be in focus and will be contradictory.  Volatility returns to more normal levels after several years of below-average swings in equity prices.

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55 THIS END UP U.S. ECONOMIC GROWTH PICKS UP 3.0%+ Growth We expect the U.S. economy will expand at a rate of 3% or slightly higher in 2015, which matches the average growth rate over the past 50 years. This forecast is based on contributions from consumer spending, business capital spending, and housing, which are poised to advance at historically average or better growth rates in 2015.

LPL Financial Member FINRA/SIPC 6 ECONOMY Current Conditions Lag Past Recoveries in All Major GDP Categories Source: LPL Financial Research 11/14/14

LPL Financial Member FINRA/SIPC 7 ECONOMY The Current Expansion Is the Fifth Longest Since WWII Source: LPL Financial Research, National Bureau of Economic Research (NBER) 11/14/14

LPL Financial Member FINRA/SIPC 8 Source: LPL Financial Research, Bureau of Labor Statistics, Haver Analytics 11/14/14 The time frame for all data is the last 10 years: 2004–2014. Several labor market indexes are being monitored by Federal Reserve Chair Janet Yellen and the Federal Open Market Committee.

LPL Financial Member FINRA/SIPC 9 Source: LPL Financial Research, Bureau of Labor Statistics, Haver Analytics 11/14/14 The time frame for all data is the last 10 years: 2004–2014. Several labor market indexes are being monitored by Federal Reserve Chair Janet Yellen and the Federal Open Market Committee.

LPL Financial Member FINRA/SIPC 10 PRIORITY SHIPPING STOCKS SHOULD DELIVER THE GOODS 5–9% Returns Historically since WWII, the average annual gain on stocks has been 7–9%. Thus, our forecast is in-line with average stock market growth. We forecast a 5–9% gain, including dividends, for U.S. stocks in 2015 as measured by the S&P 500. This gain is derived from earnings per share (EPS) for S&P 500 companies growing 5–10%. Earnings gains are supported by our expectation of improved global economic growth and stable profit margins in 2015.

LPL Financial Member FINRA/SIPC 11 STOCKS Probability of Solid Stock Market Gain if U.S. Economy Not in Recession Source: LPL Financial Research, Bloomberg data, NBER 11/14/14 Past performance is not indicative of future results. Indexes are unmanaged and cannot be invested into directly.

LPL Financial Member FINRA/SIPC 12 STOCKS Earnings Indicator Pointing Higher Source: LPL Financial Research, Thomson Reuters, FactSet 11/14/14 Past performance is not indicative of future results. Indexes are unmanaged and cannot be invested into directly.

LPL Financial Member FINRA/SIPC 13 STOCKS Stock Returns Have Been Healthy in the Year Prior to the First Rate Hike…And in the Year Following Source: LPL Financial Research, Bloomberg data, FOMC 11/14/14 Past performance is not indicative of future results. Indexes are unmanaged and cannot be invested into directly.

LPL Financial Member FINRA/SIPC 14 STOCKS Over the Long Term, PEs Have Provided a Road Map for Equity Returns Source: LPL Financial Research, Standard & Poor’s 11/14/14 Scale is inverted. PEs shown are trailing.

LPL Financial Member FINRA/SIPC 15 All investing entails risk, including loss of principle. International and emerging markets investing involves special risks, such as currency fluctuation and political instability, and may not be suitable for all investors. Small cap stocks may be subject to a higher degree of risk than more established companies’ securities. The illiquidity of the small cap market may adversely affect the value of these investments. Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. STOCKS Investment Ideas Expected to Deliver in 2015  Cyclical sectors have historically performed well during the middle and late stages of the business cycle.  Small caps have potential to participate in market upside in 2015, based on their U.S.-based exposure.  U.S. stocks may be poised for better growth — and trajectory of that growth — relative to developed foreign equity markets.

LPL Financial Member FINRA/SIPC 16 ADDED POSTAGE REQUIRED VOLATILITY BRINGS OPPORTUNITY AND CHALLENGES Return of Volatility

LPL Financial Member FINRA/SIPC 17 VOLATILITY Number of Stock Market Pullbacks & Corrections During Bull Markets Since WWII Source: LPL Financial Research, Bloomberg 11/14/14 Pullbacks defined as S&P 500 losses of more than 5%. Corrections defined as 10–20% losses. Past performance is not indicative of future results. One cannot invest directly into an index.

LPL Financial Member FINRA/SIPC 18 VOLATILITY Five Forecasters: Recession Unlikely in 2015 Source: LPL Financial Research, Bloomberg 11/14/14

LPL Financial Member FINRA/SIPC 19 There is no guarantee that a diversified portfolio will enhance overall returns or outperform a nondiversified portfolio. Diversification does not ensure against market risk. Merger arbitrage: This strategy consists of buying shares of the target company in a proposed merger and fully or partially hedging the exposure to the acquirer by shorting the stock of the acquiring company or other means. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values and yields will decline as interest rates rise, and bonds are subject to availability and change in price. Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate, and credit risk, as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. VOLATILITY Investment Ideas Expected to Deliver in 2015 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. Currency risk is a form of risk that arises from the change in price of one currency against another. Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments.  Merger arbitrage historically produces low correlations to stocks and bonds, with risk similar to fixed income.  Fixed income remains one of the best diversifiers of equity market drawdowns.  Global macro should provide strong diversification benefits, with reduced correlation and a potentially attractive risk/return profile.

LPL Financial Member FINRA/SIPC 20 HANDLE WITH CARE FRAGILE RETURNS INSIDE Flat Returns

LPL Financial Member FINRA/SIPC 21 BONDS A 0.25% to 0.75% Rise in Bond Yields Translates to Low or Marginally Negative Total Returns Source: LPL Financial Research, Barclays Aggregate Bond Index data 11/14/14 Barclays Aggregate Bond Index Total Return Scenario Analysis: Projected total return over one-year horizon for given change in interest rates. This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.

LPL Financial Member FINRA/SIPC 22 BONDS Inflation-Adjusted Yields Remain Below Historical Norms Source: LPL Financial Research, Bloomberg, Barclays Index data 11/14/14 Inflation-adjusted yields may be below zero if inflation is greater than yields.

LPL Financial Member FINRA/SIPC 23 BONDS Low Defaults Should Support High-Yield Bond Valuations Source: LPL Financial Research, Moody’s, Barclays Index data 10/31/14 High-yield spread is the yield differential between the average yield of high-yield bonds and the average yield of comparable maturity Treasury bonds.

LPL Financial Member FINRA/SIPC 24 BONDS Smaller Packages: The Municipal Bond Market May Continue to Shrink in 2015 Source: LPL Financial Research, Federal Reserve Flow of Funds 06/30/14

LPL Financial Member FINRA/SIPC 25 BONDS Treasury Yields Begin to Move 3–6 Months Before First Hike Source: LPL Financial Research, Bloomberg data 10/31/14 Past performance is not indicative of future results.

LPL Financial Member FINRA/SIPC 26 BONDS Strong Foreign Demand May Help Support Treasuries Due to a Wide Yield Advantage Source: LPL Financial Research, Bloomberg data 10/31/14 Past performance is not indicative of future results.

LPL Financial Member FINRA/SIPC 27 High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors. Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate, and credit risk, as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. 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. BONDS Investment Ideas Expected to Deliver in 2015  High-yield bonds have benefitted from stable credit quality and low defaults.  Among high-quality bonds, municipal bonds and investment-grade corporate bonds have offered modest value.

LPL Financial Member FINRA/SIPC 28 Weighing the Sector Implications of Midterm Election Results: XXXXXX  Energy: Expect more exports and faster permitting.  Healthcare: ACA changes likely on the way.  Financial services: Possible relief on the horizon for regional banks.  Housing finance reform: Legislation possible, but significant hurdles exist.

LPL Financial Member FINRA/SIPC 29 Most Important Delivery Will Be Setting the Stage for 2016  Deliver strong economic growth,  improving labor conditions,  a continued environment for fast-growing corporate earnings,  and a favorable backdrop for expanding equity prices.

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LPL Financial Member FINRA/SIPC 31 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 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 security. To determine which investments 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 indexes are unmanaged and cannot be invested into directly. Economic forecasts set forth may not develop as predicted, and there can be no guarantee that strategies promoted will be successful. The Leading Economic Index (LEI) is an economic variable, such as private-sector wages, that tends to show the direction of future economic activity. 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. The Barclays Capital Aggregate Bond Index is an unmanaged market capitalization-weighted index of most intermediate-term U.S. traded investment-grade, fixed rate, non- convertible, and taxable bond market securities including government agency, corporate, mortgage-backed, and some foreign bonds. NYSE Composite Index is an index that measure the performance of all stocks listed on the New York Stock Exchange. The NYSE Composite Index includes more than 1,900 stocks, of which over 1,500 are U.S. companies. The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve Board that determines the direction of monetary policy. The FOMC is composed of the board of governors, which has seven members, and five reserve bank presidents. The Labor Market Conditions Index (LMCI) is a dynamic factor model of labor market indicators, which extracts the primary common variation from 19 labor market indicators. This tool was recently developed by the Federal Reserve. 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. 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. IMPORTANT DISCLOSURES Tracking # Exp. 12/15

LPL Financial Member FINRA/SIPC 32 LPL Financial Member FINRA/SIPC THANK YOU FOR YOUR BUSINESS