Your Journey Toward Retirement

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We are a coordinated team of trusted, experienced professionals working toward your success!

Model Portfolios:A Recap of Performance

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Understanding Asset ClassesHigher Reward Potential Usually Means More Risk

This example is hypothetical and for illustrative purposes only.

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Understanding Asset ClassesHigher Reward Potential Usually Means More Risk

This example is hypothetical and for illustrative purposes only.

Reward

Ris

k

Cash

Bonds

StocksFund 100

Fund 80

Fund 60

Fund 40

Income Fund

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Portfolio Objective

This portfolio is suitable for someone who wants to take advantage of the long-term potential of the markets and has a risk tolerance to handle the gyrations of the market.

Risk / Return Chart

HIGH LOW

PORTFOLIO INVESTMENT STYLE

Portfolio Expenses (Net Expense Ratio)

Weighted Average Total: 0.37%

Portfolio Performance

Portfolio 7.0% 26.7% 10.1% 0.0% 11.0%

Benchmarks 4.3% 23.8% 10.3% -2.4%7.7%

3 Mo. 1 Yr. 3 Yr. 5 Yr. 10 Yr.

Source: Morningstar through September 30, 2012

Source: Morningstar through September 30, 2012

U.S. Equity - 65%

Int'l Equity - 30%

Real Estate - 5%

Fund 100 – Value Tilt

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Portfolio Objective

This portfolio is suitable for someone who is nearing retirement or someone who has a moderate risk tolerance.

Risk / Return Chart

HIGH LOW

PORTFOLIO INVESTMENT STYLE

Portfolio Expenses (Net Expense Ratio)

Weighted Average Total: 0.30%

Portfolio Performance

Portfolio 4.7% 17.6% 9.3% 3.8% 9.4%Benchmarks 3.2% 16.4% 8.7% 1.6% 6.8%

3 Mo. 1 Yr. 3 Yr. 5 Yr. 10 Yr.

Source: Morningstar through September 30, 2012

Source: Morningstar through September 30, 2012

U.S. Equity - 39%

Int'l Equity - 18%

Bonds - 40%

Real Estate - 3%

Fund 60 – Value Tilt

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Portfolio Objective

This portfolio is suitable for someone who is in retirement or someone who has a very low risk tolerance.Risk / Return Chart

HIGH LOW

PORTFOLIO INVESTMENT STYLE

Portfolio Expenses (Net Expense Ratio)

Weighted Average Total: 0.17%

Portfolio Performance

Portfolio 1.5% 5.6% 6.8% 6.9% 5.5%

Benchmarks 1.6% 5.1% 6.2% 6.5% 5.3%

3 Mo. 1 Yr. 3 Yr. 5 Yr. 10Yr.

Source: Morningstar through September 30, 2012

Source: Morningstar through September 30, 2012

Bonds - 100%

Income Fund – Value Tilt

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8.69% 8.17%

11.43%

9.68% 10.03%

8.66%

12.82%

9.23%

20.24%

17.37%

5.21% 5.34%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

US Large CapValue

US Small CapValue

Int'l LargeCap Value

Int'l SmallCap Value

EmergingMarkets Value

Fixed (Int.Term)

Asset Class Funds Compared to Benchmarks October 1, 2002 – September

30, 2012

Source: Dimensional Funds and Vanguard, 10/01/02 through 09/30/12. The Asset Class Funds used for each respective asset class are DFA Large Cap Value I, DFA US Small Cap Value I, DFA Int’l Value I, DFA Int’l Small Value I, DFA Emerging Markets Value I, and Vanguard Total Bond Market Index Fund. Indexes used for each respective asset class are Russell 1000 Value Index, Russell 2000 Value Index, MSCI EAFE Index (net-div.), MSCI EAFE Small Cap Index (prices only), MSCI Emerging Markets Index (gross div.), and Spliced Barclays US Agg Float Adj lndex (Barclays Capital US Aggregate Bond Index through 12/31/09; Barclays Capital US Aggregate Float Adj Index thereafter). Performance data represents past performance. Past performance is no guarantee of future results. Fund returns are net of fund expenses; indices are not subject to expenses. The deduction of investment advisor fees are not reflected in the returns presented. Russell data copyright © Russell Investment Group 1995-2012, all rights reserved.

DFA Asset Class Funds

Vanguard Asset Class Funds

Index (Benchmark)

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$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

Berkshire Hathaway B 100% Equity

$162,065

$212,780

Source: 2011 Morningstar. All Rights Reserved. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. The 100% Equity Portfolio includes 4% in DFA Emerging Markets I, 8% in DFA Int’l Small Cap Value I, 4% in DFA Int’l Small Company I, 14% DFA Int’l Value I, 20% DFA US Large Cap Value I, 14.25% in DFA US Large Company I, 10.75% in DFA US Micro Cap I, 25% in DFA US Small Cap Value I. The 100% Equity Portfolio is rebalanced semi-annually with no advisor fee included.

Berkshire Hathaway B versus 100% Equity $100,000 Invested - January 1, 2001 – December 31, 2011

Media HypeRule 1: Don’t fall in love with one stock.

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Questions about Facebook

• When was it first launched?

• How many active users?

• What % of the U.S. population uses Facebook?

Facebook Inc. began trading publicly in mid-May, priced at $38.

– Since the public offering, the stock as of September 30th $21.60.

– The company is the subject of dozens of shareholder lawsuits – Down 45% from IPO price.

Don’t Fall in Love

February 2004

Over 1 billion

42%

Sources: Facebook Inc. and Yahoo! Finance

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These are the best stock picks??

ERICSSON $26 $10FAMILY GOLF CENTERS $23 ZEROGENERAL MOTORS $73 BANKRUPTHOMEBASE $73 BANKRUPT KNIGHTSBRIDGE TANKERS $22 $15LIBERTY MEDIA GROUP $40 $50MCI WORLDCOM $59 GONECHARLES SCHWAB $58 $53STORAGE TECHNOLOGY $37 $88

“Expert” Picks

1998 Today’s STOCK share price share price

Source: Article “Expert” Picks by Vestory, Mar 30, 2012 http://www.vestory.com/2012/03/30/expert-picks/

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-13.42%

2.11%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Cramer Picks

S & P 500

Investment Media Hype

Source: Jim Cramer’s Mad Money Stock Picks for Thursday, January 6, 2011. The S&P data are powered by Standard & Poor’s Index Services Group. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results.

Cramer Can’t Beat the Index!!

I’d be mad I’d be mad about my about my money!money!

Media HypeRule 2: Understand that they sell fear.

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$31.7 Trillion as of December 31, 2011

In US dollars. Market cap data is free-float adjusted from Bloomberg securities data. Many small nations not displayed. Totals may not equal 100% due to rounding. Dimensional makes case-by-case determinations about the suitability of investing in each emerging market, making considerations that include local market accessibility, government stability, and property rights before making investments. For educational purposes; should not be used as investment advice. 1. An example large cap stock provided for comparison.

Capitalization over time($ trillions):

Developed Markets

Emerging Markets

Frontier Markets

Bloomberg Index Affiliation

World Market Capitalization

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What you know that the market doesn’t….

Quotes from the AP Press:

• Before 8 a.m. “Stock Futures Rise on Hope for Greece Bailout.”

• 45 minutes later . . . “Stocks Down on Greece Default Fears

Greece has been in sovereign default during 105 of the last 200 years.

Facts About Greece

Source: Client’s Corner: What Do You Know That The Market Doesn’t? August 2011, Vol 11, Issue 8 – http://www.nickmurraynewsletters.com

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• S&P has increased 11 % compounded annually. Those gains came despite 10 bear (down) markets and 10 recessions.

• Do you think the 2008 financial and auto bailouts were unprecedented? To name a few, remember

• $293 billion bailout of the savings and loan industry (1989)

• $10 billion bailout of New York City (1975)

• First Bailout of Chrysler (1980)

• Bailout of Lockheed (1971)

• Unemployment = topped 8-10% in 16 out of 61 years.

The Last 61 Years – History Lesson

Source: Schroeder, Richard. “Why You Should Keep Investing in 2012 (And Even Up Your Ante)” Investment Update, 1 Jan 2012, Vol 16, Issue 7

Media HypeRule 3: Ignore them and

keep your emotions in check….

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After hearing the “experts”…

Financial Planning Basics

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Amount per

month

Advantage of ROTH over Ded.

25 Year Old $200 $1,802,000 $2,064,000 $262,000

35 Year Old $200 $393,000 $517,000 $124,000

45 Year Old $200 $71,000 $93,000 $22,000

Deductible (pre-tax)

ROTH (post-tax)

Assumptions: Retire at age 65, Date of Death at 90, 9% annual return on investments, 20% Federal, 5% State and you don’t resave the tax savings.

ROTH (post-tax) versus Deductible (pre-tax)

The advantage of funding a Roth

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Do you need (or update) a will, guardianship on children, power of attorneys.

Any update needed on beneficiaries?

Have you considered a ROTH 457b?

Did you cover your risks? Term life, disability, long term care.

Did you refinance your debt?

Basic Financial Planning

Thanks for listening.

Any questions…..

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Important Disclosures Regarding Simulated StrategiesOur investment strategy is based on the principles of Modern Portfolio Theory (MPT) The tenets of MPT provide for a passive long-term buy-and-hold strategy implemented through globally diversified portfolios. Mutual funds representing asset classes where academic research has demonstrated higher expected returns for the level of risk taken are combined in a single portfolio. Portfolios are constructed in a manner to provide diversification for the purpose of reducing the risk caused by volatility. Portfolios are rebalanced to maintain agreed upon asset allocations.

Historical performance information is provided to demonstrate the methodology used in building portfolios using the aforementioned investment strategy. This information should not be considered as a demonstration of actual performance results, and should not be interpreted as such. The results are based on back-tested data and not actual accounts.

The back-tested data used in creating the simulated strategies includes simulated data where live funds were not in existence to provide actual returns. The simulated data was developed in the belief that it represents the historic performance of the live funds. Live funds will differ from simulated strategies. Simulated data does not reflect deductions of fund expenses that an investor would pay and does not represent results of actual trading. Live funds may exclude securities with characteristics not otherwise excluded in certain databases used in some simulated strategies. Sources and Descriptions of Data (following these disclosures) is an integral part of and should be read in conjunction with this explanation.

Back-tested data does not represent the impact that material economic and market factors might have on an investment advisor’s decision-making process if the advisor were actually advising an investor. The back-testing of performance differs from actual account performance because an investment strategy may be adjusted at any time, for any reason and can continue to be changed until desired or better performance results are achieved. The back-tested results assume ordinary and capital gains and dividends are reinvested, regular rebalancing and no income taxes. Information about advisor fees and expenses is available upon request.