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 First Quarter 2014 Market Overview

Economic Summary: First Quarter 2014 Milestones –Equity markets hit all-time high (again) –Russia annexes Crimea, sparking outcry from the West –Janet Yellen eases up on dovish position in latest speech –Fed tapering continues as expected –Companies worldwide gain confidence to increase spending –Debt limit raised, ending threat of government shutdown –U.S. support builds for sale of gas to Europe, Ukraine –EU and U.S. resume trade talks, following NSA spying –American Airlines returns to Wall Street –Investors eye Chinese stimulus 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.

Q1 2014: Equity Returns by Style Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. ValueBlendGrowth Large Mid Small Source: Commonwealth Asset Management/Morningstar Direct

Q1 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

Q1 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

Q1 2014: Fixed Income Returns by Style Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results Q1 High-Yield High-Yield U.S. Treasury 9.81 Emerging Markets High-Yield 7.42 Emerging Markets 3.89 Emerging Markets Emerging Markets Corporates 8.15 High-Yield Mortgage –1.39 Foreign Sovereign 3.16 Corporates Corporates 9.00 Emerging Markets 8.02 Foreign Sovereign Corporates –1.53 High-Yield 3.00 Foreign Sovereign U.S. Core 6.54 U.S. Core 7.84 Corporates 9.82 U.S. Core –2.02 Corporates 2.94 U.S. Core 5.93 U.S. Treasury 5.87 Mortgage 6.14 U.S. Core 4.21 U.S. Treasury –2.75 U.S. Treasury 0.51 Mortgage 5.76 Mortgage 5.67 Foreign Sovereign 4.78 Mortgage 2.59 Foreign Sovereign –4.05 U.S. Core 1.84 U.S. Treasury −3.57 Foreign Sovereign 4.05 High-Yield 4.38 U.S. Treasury 1.99 Emerging Markets –6.45 Mortgage 1.58 Source: Commonwealth Asset Management/Morningstar Direct

Treasury Yields Yield up = Price down

Direction of Rates? 3%

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 Strong!

Unemployment Rate

Average Weekly Hours

Business and Manufacturing

ISM Manufacturing Robust!

Capacity Utilization

Economic Expansion

Industrial Production

Federal Surplus/Deficit

Federal Debt

Conclusions Job growth was strong in Q1; unemployment fell to 6.7%. Some softening on the ISM front, though still positive. The housing recovery is still progressing, but pricing may slow in the near term. GDP growth is expected to continue, with 2014 projections hovering in the 3% range. Average weekly hours higher, fueling talk of wage inflation. High-yield spreads are very tight. Interest rates appear to be somewhat fairly valued. Municipals witnessed strong rebound after lackluster 2013.

Looking Forward... Key themes to monitor –Yellen and tapering in 2014 –Earnings season for Q1 (beat or miss estimates?) –Will the influx in housing inventory curtail price increases? –Is the ECB going to institute much-anticipated quantitative easing –Election season in the latter half of the year –Direction of Treasury over the near term –Tight credit spreads across the board –Are emerging market equities poised for a rebound?

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. High-yield/junk bonds invest substantially in lower-rated bonds and are issued by companies without long track records of sales and earnings or by those with questionable credit strength. There is a greater possibility that adverse changes in the economy or poor performance by the issuers of these bonds may affect the ability to pay principal and interest. High-yield bonds involve substantial risks, tend to be more volatile, and, therefore, may not be suitable for all investors. Municipal bonds are federally tax-free but may be subject to state and local taxes, and interest income may be subject to federal alternative minimum tax (AMT). The purchase of bonds is subject to availability and market conditions. There is an inverse relationship between the price of bonds and the yield: when price goes up, yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity. Some bonds have call features that may affect income. Emerging market investments involve higher risks than investments from developed countries and also involve increased risks due to differences in accounting methods, foreign taxation, political instability, and currency fluctuation.