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 Fourth Quarter 2013 Market Overview

Economic Summary: Fourth Quarter 2013 Milestones –Equity markets hit all-time high (again) –U.S. government partially shuts down, sparking default fears –Janet Yellen nominated to head Federal Reserve –Federal Reserve announces tapering –China to allow private investors to own 15% of state enterprises –U.S. soon to be world’s biggest oil producer, IEA says –IPO raises at least $1.8B for Twitter –NSA spying puts pressure on EU-U.S. trade talks –House overwhelmingly approves budget deal –American Airlines returns to Wall Street –100,000 Ukrainian protesters demand agreement with EU 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.

Q4 2013: S&P 500 Index and Dow Jones Industrial Average Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

Q4 2013: 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

Q4 2013: Fixed Income Returns by Style Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results Q4 High-Yield High-Yield U.S. Treasury 9.81 Emerging Markets High-Yield 3.50 Emerging Markets Emerging Markets Corporates 8.15 High-Yield Emerging Markets 1.32 Corporates Corporates 9.00 Emerging Markets 8.02 Foreign Sovereign Corporates 1.11 Foreign Sovereign U.S. Core 6.54 U.S. Core 7.84 Corporates 9.82 Foreign Sovereign 1.10 U.S. Core 5.93 U.S. Treasury 5.87 Mortgage 6.14 U.S. Core 4.21 U.S. Core −0.14 Mortgage 5.76 Mortgage 5.67 Foreign Sovereign 4.78 Mortgage 2.59 Mortgage −0.47 U.S. Treasury −3.57 Foreign Sovereign 4.05 High-Yield 4.38 U.S. Treasury 1.99 U.S. Treasury −0.75 Source: Commonwealth Asset Management/Morningstar Direct

Fixed Income

Treasury Yields Yield up = Price down

Fixed Income Past performance is no guarantee of future results.

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

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

Credit and Banking: Inflation

Employment

Change in Nonfarm Payrolls Source: Commonwealth Asset Management/Bloomberg Strong!

Unemployment Rate

Average Weekly Hours

Average Weekly Hours: Manufacturing

Business and Manufacturing

ISM Manufacturing Robust!

ISM Nonmanufacturing Strong move!

Capacity Utilization

Economic Expansion

Quantitative Easing

Conclusions Job growth was strong in Q4; unemployment fell to 7 percent. Inflation is not a large concern, for now. ISM shows very strong readings. Treasury rates closed out 2013 at two-year highs. 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-percent range. Manufacturing renaissance could continue with improvements in employment. High-yield spreads are approaching decade lows.

Looking Forward... Key themes to monitor –Yellen takes helm at the Fed –Earnings season for Q4 (beat or miss estimates?) –Is the housing recovery too much, too fast? –Is Europe poised for a continued recovery? –Ongoing debt ceiling debate in coming months –Direction of Treasury rates and impact on bond prices –Historical lows on many fixed income sectors, including high-yield corporates

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.