WealthProtect Status Update: November 2013

by Reginald A.T. Armstrong, CPWA®

We email the status of our WealthProtect System* monthly and give the probability (Low, Mid, High) of a change in status within the next two months. We also include a commentary on actions taken this month.

Asset Class Status Probability of

Status Change

US Equities In Low

Developed Foreign Equities In Low

Emerging Foreign Equities In Mid

Real Estate Investment Trusts In High

Natural Resource Equities In Mid

Commodities Out High

Energy MLPs In Low

Commentary

Our system triggered back into emerging markets and REITs, while the commodities asset class was still out. US equities continued their outperformance, especially for smaller capitalization stocks year to date (as measured by the S&P 500 and Russell 2000). We took this as an opportunity to rebalance client portfolios. While by some measures US equities continue to appear fair or undervalued, by several longer-term measures US stocks seem overvalued. We will continue to stay fully diversified, using our WealthProtect System to help us potentially avoid bear markets. That being said, we are seeking to reduce the sensitivity of the triggers for the more volatile asset classes in order to attempt to reduce false signals.

*The Armstrong Wealth Management Group WealthProtect System is an investment risk control system designed (but not guaranteed) to limit significant losses in major bear markets (excess of 30% loss from market peak to market trough). It is NOT designed to prevent normal market losses (under 20%). No strategy can assure a profit or protect from a loss. Occasional false signals can reduce returns.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts may not develop as predicted.

Stock investing involves risk including loss of principal. The prices of small and mid-cap stocks are generally more volatile than large cap stocks. International and emerging market investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

Investing is Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investments objectives of this program will be attained.

The fast price swings in commodities will result in significant volatility in an investor's holdings.

Investing in MLPs involved additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilutions and voting rights. MLPs may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement and difficulty in buying and selling. MLPs are subject to significant regulation and may be adversely affected by changes in the regulatory environment including the risk that an MLP could lose its tax status as a partnership. Additional management fees and other expenses are associated with investing in MLPs.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

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