1. An Update on Global Capital Markets Ronald E. Copley, Phd, CFA O: 910-452-7147 E: Ron.Copley@gmail.com www.CopleyInvestmentManagement.com November 5, 2009Ron.Copley@gmail.com www.CopleyInvestmentManagement.com 1

2. Total Return Equation Total Return Components for International Investment:  Yield--dividends and interest (income/begin price)  Growth—price appreciation (end price-begin price)/begin price  Currency Conversion—repatriation of foreign currency to US dollars Example t=0: Invest $1000 in a Euro-denominated investment (exchange 1USD:1€) T=1: Investment earns yield (5%) plus growth (10%) plus currency conversion (exchange 1USD:1/2€, or 1€:2USD) Total Return = 5% + 10% + 100% = 115% 2

3. 3

4. Foreign Country Returns 4

5. 5

6. UUP vs. GOLD 6

7. 7

8. U.S. Equity Performance 8

9. Foreign Equity Performance 9

10. Fixed Income Markets 10

11. PCY vs. SHV (Exchange Traded Funds) PCY: Seeks investment results that correspond generally to the price and yield, before fees and expenses, of the DB Emerging Market USD Liquid Balanced index. SHV: Seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital U.S. Short Treasury Bond Index. 11

12. 12

13. 13 http://www.dailymarkets.com/stocks/2008/10/21/credit-default-swaps-%E2%80%93-a-disastrous-unwind/

14. Size of the CDS Market 14

15. 15 http://www.inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp

16. CIM’s Selected Choices for Growth China: Baidu, Inc (BIDU)—Search Engine BYD CO LTD H SHS (BYDDF)—Electric Cars US: Apple Inc (AAPL)—Computers STEC, Inc (STEC)—Solid State Storage Latin America: iShares S&P Latin America 40 Index (ILF) T. Rowe Price Latin America Fund (PRLAX) Europe/Asia: iShares MSCI EAFE Index (EFA) iShares MSCI Emerging Markets Index (EEM) 16

17. Conclusions Global equity markets attractive especially non-dollar denominated investments in Asia; Global bond markets still adjusting as spreads continue to narrow (long rates declining relative to short rates); US dollar in a long-term decline, but will not crash; Credit Default Swaps remain a potentially large problem; Deflation is a short-term problem, inflation a long-term problem; Gold is an excellent hedge against uncertainties. 17

18. You can find a copy of this presentation and others at: www.CopleyInvestmentManagement.com/articles Thank you. www.CopleyInvestmentManagement.com/articles 18