Robertson, Griege & Thoele Investment Market Analysis January st Quarter Market Review Global Markets Rebound st Quarter Market Review Global Markets Rebound

Robertson, Griege & Thoele Global equities rebound on strong earnings and attractive valuations. U.S. stocks have their best first quarter since 1998 (positive) Economic data, including employment, GDP, and leading indicators, surpass expectations suggesting that the expansion may be self- sustaining (positive) Worries surrounding Europe’s banking situation and debt levels abate as the European Central Bank provides liquidity to banks and Greece restructures its debt (positive) Interest rates increase in response to a strengthening economy and decreasing chances of additional monetary easing, creating headwinds for bonds (neutral) Tensions between Israel and Iran escalate causing volatility in oil markets (negative) Summary of 1 st Quarter

Robertson, Griege & Thoele Sector Returns 3 The sectors that led in 2011 underperformed in the first quarter while the sectors that lagged in 2011 provided market leadership to start the year This rapid change with the turn of the calendar demonstrates the difficulty in trying to time markets or successfully rotate between sectors

Robertson, Griege & Thoele Asset Class Returns 4 Rising interest rates and optimism around the economy were a headwind to fixed income returns The asset classes that underperformed in 2011 (domestic and foreign stocks) bounced back strongly during the first quarter as attractive valuations and reduced fear caused equity markets to trade higher Large Companies Small Companies Foreign Companies Real Estate

Robertson, Griege & Thoele Equities vs. Bonds 5 Cumulative Long-Term Mutual Fund Flows ($Bln) Source: Investment Company Institute “Bonds promoted as offering risk-free return are now priced to deliver return- free risk” – Shelby Cullom Davis Since January 2009, $263Bln has been pulled from U.S. equity mutual funds, yet the S&P500 is up over 55% during that time Equities offer a historically attractive yield advantage versus bonds and provide better inflation protection Source: J.P. Morgan Asset Management, Factset

Robertson, Griege & Thoele Global Easing 6 Government balance sheets have grown rapidly since the credit crisis of 2008, resulting in excess liquidity This excess liquidity has helped offset a deleveraging of the public and private sector Investment markets have benefitted as excess liquidity is used to buy financial assets

Robertson, Griege & Thoele Presidential Election Years 7 Election years have historically been strong return years for the market…. Year S&P 500 ReturnYear S&P 500 Return % % % % % % % % % % % % % % % % % % % % %2012?? Average:11.0% Median:11.1% ….however, years marked by concerns regarding the banking system and/or geopolitical uncertainty have been exceptions (Credit Crisis) (Tech Bubble) (Depression) (WWII)

Robertson, Griege & Thoele Themes Equities are attractive relative to bonds given zero interest rate policy, strong corporate balance sheets, and reasonable equity valuations. The benefits of diversification and active management are increasing given decreasing correlations among asset classes, regions, and securities. Consistent rebalancing is adding meaningful value in the midst of volatility. Risks Election year uncertainty around the globe, large deficits, and the looming expiration of tax breaks and fiscal stimulus in the U.S. present increased risk in the near future. The European Union has successfully addressed concerns regarding bank liquidity in the near term, though the solvency of its members (Greece, Portugal, Spain, Italy, Ireland) remains in question. China’s economy has slowed from 12% to 8% in two years which dampens its ability to spearhead global growth. Themes and Risks 8