Commonwealth Financial Network ® does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Securities and advisory services offered through Commonwealth Financial Network ®, Member FINRA/SIPC, a Registered Investment Adviser. Presented by Matthew A. Parsons 525 N 9 th St, Cottage Grove, Oregon (541) Second Quarter 2012 Market Overview

Economic Summary: Second Quarter 2012 Milestones –The Federal Reserve (the Fed) extends Operation Twist –Spanish borrowing losses reach unsustainable levels –U.S. Supreme Court lets most of health care overhaul go forward –J.P. Morgan experiences sizeable trading losses, estimated at $4.4 billion –China unexpectedly cuts interest rates to revive expansion –Romney assured GOP presidential nomination after Texas primary win –Facebook IPO lands flat –Rumors of centralized budget authority surface in Europe –Bernanke sends message to Obama, Congress about “fiscal cliff” –Socialists win election in France –Obama proposes extension of tax cuts for incomes less than $250,000 Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. All data as of 6/30/12 unless otherwise noted.

S&P 500 Index and Dow Jones Industrial Average: Second Quarter 2012 Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

Economic Themes Housing Credit and banking Fixed income Employment Business and manufacturing activity Inflation Consumer behavior Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results.

Housing: Prices and Supply

Housing: Affordability

Housing: Price-to-Rent Ratio

Credit and Banking

Credit and Banking continued

Fixed Income Past performance is no guarantee of future results.

Fixed Income continued Past performance is no guarantee of future results.

Fixed Income continued Past performance is no guarantee of future results.

Employment Source: Commonwealth Asset Management/Bloomberg

Employment continued

Business and Manufacturing Activity Contraction Slowing

Business and Manufacturing Activity continued Contraction Slowing

Business and Manufacturing Activity continued

Inflation

Consumer Behavior

Conclusions Payrolls: –Private payrolls slowed a bit –Service-producing and small firms led increase U.S. economy slowed a bit, though performing relatively well Consumer most likely approaching end of deleveraging phase Housing appears to have found a footing; prices increasing Service-producing sectors outpacing goods-producing Inflation much less of a concern at the moment Housing and vehicle sales may create unexpected tailwind

Looking Forward... Key themes to monitor –Employment improvement necessary for sustained recovery –Earnings season for Q2 (beat or miss estimates?) –European debt crisis –Manufacturing: Will it continue to decline? –Direction of ISM indices over coming months –Direction of inflation: Will a further decline warrant QE3? –Can payroll growth remain positive despite global slowdown?

Disclosure Investing involves risks, including loss of principal amount invested due to market fluctuations. All indices are unmanaged, and investors cannot invest directly in an index. Past performance is not indicative of future results. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. The Bank of America Merrill Lynch US Corporate Index tracks the performance of U.S. dollar-denominated investment-grade corporate debt publicly issued in the U.S. domestic market. The Merrill Lynch Municipal Master Index tracks the performance of U.S. dollar-denominated investment-grade tax- exempt debt publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market. The Bank of America/Merrill Lynch High Yield Master II Index tracks the performance of U.S. dollar-denominated below-investment-grade corporate debt publicly issued in the U.S. domestic market. International investing involves special risks such as currency fluctuation and political instability. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions.