1. Robertson, Griege & Thoele Investment Market Analysis January 2006 2010 Investment Market Review Economic Recovery Transitions To Expansion 2010 Investment Market Review Economic Recovery Transitions To Expansion

2. Robertson, Griege & Thoele Worries over European sovereign debt levels and austerity programs lead to mid-year selloff Assets appreciate in second half as economic data turns consistently positive and fears of a double dip recession subside U.S. economy adds over one million jobs but the reality of a slow return to full employment sets in Additional Federal Reserve asset purchases results in a strong year end rally in equities and other risk assets Extension of Bush tax cuts is passed and additional stimulus enacted after lopsided mid- term election Summary of 2010 2

3. Robertson, Griege & Thoele Debt Service Ratio Returning to Normal Levels Household Debt Service Ratio 3 Due to low interest rates, deleveraging, and foreclosures, households are returning to a more normal debt burden which increases their ability to both save and consume…. Creation of debt bubble sets the stage for financial crisis Bubble bursts and households eliminate debt

4. Robertson, Griege & Thoele Continued Monetary Stimulus 4 Quantitative Easing (2) …..while the Federal Reserve mitigates the negative impact of this process by supplying liquidity to capital markets.

5. Robertson, Griege & Thoele 5 2010 Market Results Several sectors (technology, consumer discretionary, consumer staples) are close to or above levels seen at the market top in October of 2007.

6. Robertson, Griege & Thoele 2010 Market Results 6 Large Companies Small Companies Foreign Companies Real Estate Risk assets, such as equities and real estate, outperformed as markets continued to rally off the 2009 lows.

7. Robertson, Griege & Thoele Long-Term Diversified Portfolios Modern Portfolio Theory (MPT) widely utilized among sophisticated investors for last 50+ years Widespread fear and rare events outside of normal economic cycles disrupt MPT in the very short-run Diversification provides the foundation to participate in recovery after turbulent periods Fear induced investment decisions and straying widely from a long-term plan can compound mistakes and negatively affect returns over time Diversified portfolios outperformed broad-based indices through the recent market cycle 7

8. Robertson, Griege & Thoele Modern Portfolio Theory in Practice Diversified Portfolio is rebalanced quarterly and consists of the following indices: 22% S&P 500, 12% Russell 2000, 14% MSCI EAFE, 25% Barclays Capital Municipal Bond, 15% Barclays Capital U.S. Corporate Investment Grade, 6% FTSE NAREIT All REITs, and 6% Dow Jones UBS Commodity A diversified portfolio has had less volatility and has increased in value since the market peak November 2007 – December 2010: Statistics Cumulative Performance Annualized Performance Standard Deviation Downside Risk Beta vs. Market Diversified Portfolio1.36%0.42%15.20%11.54%0.68 Russell 2000-0.91%-0.29%27.66%20.91%1.21 S&P 500-12.77%-4.22%21.68%16.19%1.00

9. Robertson, Griege & Thoele 9 The Cycle of Market Emotions Source: Janus Point of Maximum Financial Risk Optimism Excitement Thrill Euphoria Anxiety Denial Fear Capitulation Relief Hope Depression Despondency Desperation Panic Point of Maximum Financial Opportunity “Temporary setback- I am a long-term investor.” “How could I have been so wrong?” “Wow, am I Smart.” Point of Maximum Financial Risk Point of Maximum Financial Opportunity “Wow, am I Smart.” Optimism How do you currently feel?

10. Robertson, Griege & Thoele 10 Tax Rates and Confidence Source: The Tax Foundation, J.P. Morgan Asset Management However, confidence still in recession territory: Unemployment stubbornly high Housing remains weak Continued deleveraging by households Long-term fiscal worries Extension of the Bush tax cuts and a payroll tax cut has provided a sentiment boost “It’s never paid to bet against America. We come through things, but it is not always a smooth ride.” – Warren Buffett

11. Robertson, Griege & Thoele Equities appear cheap relative to bonds 11 Equity Market Valuation ??? Source: Standard & Poor’s, Moody’s, FactSet, J.P. Morgan Asset Management Things for investors to consider: Consistently rebalancing naturally leads to buying low and selling high Hedged strategies can lower risk while still allowing investors to participate in up markets Often, the best opportunities come from areas that have been shunned by the investing public "Sustained deflation can be highly destructive to a modern economy and should be strongly resisted“ – Ben Bernanke (2002) The Fed wants investors to take risk… … but be careful of overvalued markets. “…balance sheet policy…adds to household wealth by keeping asset prices higher than they otherwise would be” – Ben Bernanke (2010)

12. Robertson, Griege & Thoele Lessons from 2010 The deleveraging process is long and can cause bouts of high volatility and uncertainty It is very difficult to provide excess return through fundamental security selection in markets dominated by macro concerns Markets dominated by fear and periods of high correlation among asset classes do not last forever and provide great opportunities to upgrade portfolios The best performing markets are not necessarily found in the fastest growing economies Corporations are adept at wringing out efficiencies and increasing profitability during difficult periods 12

13. Robertson, Griege & Thoele Yields on tax-exempt municipal bonds are compelling relative to Treasuries, especially after the 4 th quarter 2010 selloff Large-cap, multinational, quality “blue chips” are trading at a discount to the overall market Investors continue to be attractively compensated for providing liquidity to companies that traditionally rely on the commercial banking sector Non-U.S. dollar denominated and real assets (energy, real estate, etc.) can serve as a hedge against dollar debasement and domestic inflation while also providing income Hedged strategies in both equities and fixed income markets allow for the ability to participate in continued expansion yet insulate portfolios from rising interest rates and increased volatility Investment Themes for 2011 13

14. Robertson, Griege & Thoele Risks to Expansion Conclusion of quantitative easing results in uncertainty and a decline in asset prices Government stimulus wears off without the necessary increase in employment, resulting in very low growth rates The housing market reaccelerates to the downside and banks fail to materially boost loan growth Global growth engines (emerging Asia and Latin America) cool, depleting a major source of earnings growth for companies Sovereign debt, expensive government programs and underfunded pensions roil capital markets Geopolitical uncertainties related to instability, nuclear proliferation, terrorism, and protectionism come to a head, creating investor anxiety and fear 14