1. Annual Investment Update September 29, 2010 Investment Security Group, Inc

2. Ranking of Countries by GDP Courtesy. IMF 2009 RankCountry GDP ($ trillions) WORLD69.8 1U.S.14.3 2China8.8 3Japan4.2 4India3.5 5Germany2.8 6 United Kingdom 2.1 7Russia2.1 8France2.1 9Brazil2.0 10Italy1.7

3. Get Global! Overseas Markets generate 75% of the world’s gross domestic product Overseas Markets generate 75% of the world’s gross domestic product 75% of publicly traded companies are listed on foreign exchanges 75% of publicly traded companies are listed on foreign exchanges 95% of world’s population is outside the USA 95% of world’s population is outside the USA Since 1965, global income, per capita has risen ten-fold Since 1965, global income, per capita has risen ten-fold

4. “The Good, the Bad and the Not-So-Ugly”

5. “The Good” Developed Asia Hong Kong Singapore Emerging Markets BRIC’s Plus: Chile Czech Rep Korea Columbia Hungary Philippines Mexico Poland Taiwan Peru Turkey Thailand Malaysia Indonesia South Africa Frontier Markets Kenya Kuwait Tunisia Jordan Tobago Lebanon Argentina Serbia Pakistan Croatia Srilanka Romania Vietnam Ukraine

6. “ The Good” Improved Economic Fundamentals Improved Economic Fundamentals  Less debt (34% vs. 85% for Dev Mkts)

8. “The Good” (Continued) Improved Economic Fundamentals Improved Economic Fundamentals  Less Debt (34% vs 85% for Dev Mkts)  Large Foreign exchange reserves  Effective Monetary Policies (3.5% cpi vs. -.8%)

9. “The Good” (Continued) Burgeoning Consumer Demand Burgeoning Consumer Demand  Younger populations  Rapidly increasing incomes  Low household debt  E. Asia:30%  E. Europe:22%  L.A.:11.7%  USA:100%  Undervalued currencies

10. “The Good” (Continued) Higher economic growth Higher economic growth

12. “The Good” (Continued) Deeper, more seasoned financial markets Deeper, more seasoned financial markets

13. “The Bad” (Developed Europe) Troublesome Economic Fundamentals Troublesome Economic Fundamentals  High Debt Levels  Aging Populations  Stifling welfare systems  Overvalued Currency?  Central bank “disconnect” with country-specific issues Will the Union Hold?

15. “ The Not-So-Ugly” (USA) Similar to Europe, but the 3 D’s are not as extreme (debt, deficits, demographics) Similar to Europe, but the 3 D’s are not as extreme (debt, deficits, demographics) More responsive central bank policies (better coordination between monetary and fiscal policy) More responsive central bank policies (better coordination between monetary and fiscal policy) Impressive Corporate Productivity/Profit Margins, healthy cash flow, balance sheets. Impressive Corporate Productivity/Profit Margins, healthy cash flow, balance sheets. High Unemployment, soft housing, high household debt, threat of heavier regulation. High Unemployment, soft housing, high household debt, threat of heavier regulation.

16. In Summary Emerging Markets: Emerging Markets: Developed Europe/Japan: Developed Europe/Japan: USA: USA: Tailwinds Headwinds Swirling Winds

17. Investing Implications ? Get in front of the tailwind! Get in front of the tailwind!  Increase emerging market exposure…..but buy at the right price. Look for diamonds in the rough.  Think contrarian. Shop for bargains in developed Europe and Japan. Don’t quit on the USA!

18. “The US economy remains almost comatose…The current slump already ranks as the longest period of sustained weakness since the great depression…Once in-a-life dislocations…will take years to work out among them: the job drought, the debt hangover, the defense industry, industry contraction, the [banking] collapse, the real estate depression, the health care cost explosion and the runaway federal deficit.” Time Magazine September 1992

19. Stock Market Exposure (Moderate Approach) Today US:30% Foreign:16% 46% Tomorrow Global Equity:30% Developed Mkts:10% 40%

20. Stock Market Exposure (Moderate Approach) Overall AllocationToday Stocks: 46% Hybrid: 21% “Defense:” 33% Tomorrow Stocks: 30% EMKTs: 10% 40% Hybrid: 10% “Defense” 50%

21. Stay Nimble

22. Flexible Allocations (Moderate Approach) Risk Off Stocks 20% Hybrid 20% Defense 60% Neutral Stocks 60% Defense 40% Risk On Stocks 70% Defense 30%

23. Shore Up the Defense!

24. Economics for Geologists By Mike Dibala

25. Plate Tectonics Earths surface made up of large plates Earths surface made up of large plates Plates in constant motion Plates in constant motion Move at different speeds, different directions Move at different speeds, different directions Where two plates move against each other geologic “hot spots” exist resulting in increased activity (earthquakes, volcanoes, mountain building etc.) Where two plates move against each other geologic “hot spots” exist resulting in increased activity (earthquakes, volcanoes, mountain building etc.)

26. Sound like the global economy? What are some of the “hot spots”?

27. Some “Hot Spots” East vs. West East vs. West Old Financial Systems vs. New Old Financial Systems vs. New

28. Thank You! Investment Security Group, Inc. 303-759-9808www.investsg.com