Commonwealth Financial Network ® does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Securities offered through Commonwealth Financial Network ®, Member FINRA/SIPC, a Registered Investment Adviser. Presented by Ruth M. Matt, CFP ® Fore River Financial, 22 Free St, Suite 201, Portland, ME Second-Quarter 2014 Market Overview

Economic Summary: Second-Quarter (Q2) 2014 Milestones –Equity markets hit an all-time high (again). –Sales of existing homes jumped in the U.S. –France approved GE’s $17 billion acquisition of Alstom assets. –The Federal Reserve (Fed) tapering continues, as expected. –The U.S. auto industry posted its strongest sales in more than 7 years. –The World Bank scaled back its forecast for global growth. 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.

Economic Summary: Second-Quarter (Q2) 2014 continued Milestones –The European Central Bank cut interest rate to a record low. –The U.S. economy contracted in the first quarter—the first time in 3 years. –The U.S. imposed economic sanctions on Putin’s associates. –The Japanese consumption-tax increase took effect. –U.N. report: Global warming endangers economy. –Germany won the World Cup. 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.

Economic Themes Equity/fixed income Housing Credit and banking Employment Consumer behavior Business and manufacturing activity 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.

Q2 2014: Equity Returns by Style Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. Source: Commonwealth Asset Management/Morningstar Direct

Q2 2014: S&P 500 Sector Valuations Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. Source: Commonwealth Financial Network/ Bloomberg

Q2 2014: Global Equity Valuations Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. Source: Commonwealth Financial Network/ Bloomberg

Fixed Income

Q2 2014: Fixed Income Returns by Style Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results Q2 High- Yield High- Yield U.S. Treasury 9.81 Emerging Markets High- Yield 7.42 Emerging Markets 4.99 Emerging Markets Emerging Markets Corporate s 8.15 High- Yield Mortgage Foreign Sovereign 3.66 Corporate s Corporate s 9.00 Emerging Markets 8.02 Foreign Sovereign Corporate s Corporate s 2.66 Foreign Sovereign U.S. Core 6.54 U.S. Core 7.84 Corporate s 9.82 U.S. Core High- Yield 2.57 U.S. Core 5.93 U.S. Treasury 5.87 Mortgage 6.14 U.S. Core 4.21 U.S. Treasury Mortgage 2.43 Mortgage 5.76 Mortgage 5.67 Foreign Sovereign 4.78 Mortgage 2.59 Foreign Sovereign U.S. Core 2.04 U.S. Treasury −3.57 Foreign Sovereign 4.05 High- Yield 4.38 U.S. Treasury 1.99 Emerging Markets U.S. Treasury 1.35 Source: Commonwealth Asset Management/Morningstar Direct

Treasury Yields Yield up = Price down

Where Are Rates Headed?

Fixed Income Past performance is no guarantee of future results.

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

Housing

Housing: Prices and Supply

Housing: Prices and Supply continued

Credit and Banking

Credit and Banking: TED Spread European Crisis

Credit and Banking: Inflation

Employment

Change in Nonfarm Payrolls Source: Commonwealth Asset Management/Bloomberg

Unemployment Rate

Business and Manufacturing

ISM Manufacturing Robust!

Capacity Utilization

Economic Expansion

Conclusions Job growth was strong in Q2; unemployment fell to 6.1 percent. ISM rebounded handily in Q2, spurred by pent-up demand. The housing recovery is still progressing, but pricing has slowed to more normal levels. GDP growth is expected to continue, with 2014 projections hovering in the 3-percent range. Capacity utilization continues to move higher. Investor appetite for high yield has pushed valuations to extremes. Interest rates on the long end are getting closer to fair value. Municipals have witnessed a strong rebound after a lackluster 2013.

Looking Forward... Key themes to monitor –The end of quantitative easing –Earnings season for Q2 (beat or miss estimates?) –Direction of housing prices in the near-term –ECB quantitative easing and impact on economy –Election season in the latter half of the year –Tight credit spreads across the board –Will emerging markets experience much-anticipated rebound? –Western relations with Russia –Capacity utilization and inflation

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.

Questions?