Main Street Main Street Advisors, LLCAdvisors, LLC

Investment Management Investment Management ServicesServices

Financial PlanningFinancial Planning

Fall 2009

Investment Management ServicesInvestment Management Services

History: Founded in 1999

Ownership: 100% owned by management

Assets Under Management:

$37,049,688

Clients: Approximately 140 individuals

and families

Investment

Approach:

We seek to add value through strategic and tactical asset allocation and careful investment manager selection

Main Street Advisors, LLCMain Street Advisors, LLC

What Is Our Edge?What Is Our Edge?

Objectivity – We are fee-only and independent. Our only incentive is to generate good results.

Diversification – We believe in diversification to reduce asset class risk but we also believe in selectively exploiting asset class opportunities.

Discipline – Our discipline is based on rational decision rules and fundamental analysis. This mitigates sloppy decision making and emotionally based decision errors.

All-Star Approach – Exceptionally in-depth research gives us access to highly skilled managers.

Quality of Service – We tailor an investment plan to your needs.

Investment PhilosophyInvestment Philosophy

Access to intensive research and a disciplined process are critical to long-term investment success.

Global diversification expands our opportunity set.

A long-term approach allows us to take advantage of mis-priced investments.

Using mutual funds allows us to access some of the world’s premier investment minds. No one organization has a monopoly on investment talent.

Investment portfolios should be customized to meet the objectives of each client.

Client-Driven Portfolio Client-Driven Portfolio ManagementManagement

Investment Strategy Consistent with Client Risk Profile

Client-driven – Client information and discussion drive risk/return assessment

Threshold for Loss – Each portfolio has a one-year loss threshold.

Experience-Based – Professional investment advisors realize most clients overstate their tolerance for risk

No Guarantees – No guarantee that risk thresholds can be avoided.

Risk Assessment

Investment ProcessInvestment ProcessFour Steps to the Discipline

US Large Cap Stocks International Stocks US Small Cap Stocks US Bonds

“Fat Pitches”

Various risk scenarios

Historical Data

Common Sense

Style Market-Cap Asset Class

Risk thresholds

“Neutral” Portfolio Allocation

Opportunistically AdjustTarget Asset Allocation

Adjust Allocation Based on Scenario Analysis

Rigorous Research to Identify Skilled Managers

Investment ProcessInvestment Process

Step 1: Neutral Allocation

It is a starting point representing a reasonable “static” asset allocation.

It provides a target allocation absent of “fat-pitch” opportunities.

It serves as a benchmark against which to measure value added.

It offers a frame of reference to ensure a consistent discipline in decision making and a benchmark against which to measure conviction.

Importance of the Neutral Allocation

Investment ProcessInvestment Process

Step 1: Neutral Allocation

Characteristics of Neutral Allocations PRIOR TO 2007–2009 “Bear”

RISK LEVEL INVESTMENT ALLOCATION

PORTFOLIO TYPE 1-Year Loss

Threshold

Probability of Violating

Loss Threshold

INV-GRADE BONDS

LARGE-CAP

STOCKS

SMALL-CAP

STOCKS

FOREIGN STOCKS

Conservative Income & Growth -5% 2.2% 75% 15% 5% 5%

Moderate Growth & Income -10% 1.4% 60% 25% 7% 8%

Balanced Growth & Income -15% 0.9% 40% 35% 10% 15%

Capital Growth -20% 1.2% 20% 50% 10% 20%

“Fat-Pitch” Opportunity — An extreme undervaluation (or overvaluation) relative to alternative asset classes.

Many Asset Class Options — Asset classes not included in the neutral allocations are considered as style and market cap opportunities.

Analysis — Identifying fat-pitches requires in-depth analysis of fundamentals and valuations.

Patience — Requires waiting for fat-pitch opportunities and not swinging at bad pitches.

Adding Value — High odds of being right over a market cycle.

Step 2: Determine Target Allocation

Investment ProcessInvestment Process

Target Allocations: Fat-Pitch Investing

Investment ProcessInvestment Process

Threshold for Loss

Each portfolio has a one-year loss threshold.

Periodic Use of Risk Scenarios

Different risk scenarios are identified and used to assess the potential impact on each holding as well as the portfolio as a whole. If risk is in excess of the threshold, the portfolio is adjusted.

No guarantees

No guarantee that risk thresholds can be avoided

Step 3: Using Scenario Analysis for Risk Assessment

Investment ProcessInvestment Process

Step 4: Select Money Managers

Quantitative Review Manager Records Return vs. Peer Group Consistency Expenses

Available UniverseAvailable Universe

Quantitative ScreensQuantitative Screens

Due Diligence:Third-Party Research

(Several Sources)

Due Diligence:Third-Party Research

(Several Sources)

A Select Few Make the Final Cut:Managers With A Sustainable Edge

A Select Few Make the Final Cut:Managers With A Sustainable Edge

Qualitative Review Disciplined Approach Obsessive in Seeking an Edge Team Focus Stability & Culture of Organization Quality Team Shareholder Orientation

Client Communication Client Communication and Relationshipsand Relationships

Strategies customized to meet each client’s goals and objectives (shy of an Investment Policy Statement)

Frequent communicationMonthly brokerage reports

Quarterly performance reports and portfolio appraisals

Quarterly client letter discussing outlook and strategy

Quarterly reviews

Investment Management Fee Investment Management Fee ScheduleSchedule

Our only revenues are paid to us by our clients exclusively.We are compensated based upon a percentage of assets under management. Our fee schedule is as follows:

1.50% for the first $250,0001.25% for the next $250,0001.00% for the next $500,000 .50% for assets in excess of $1,000,000

NOTE: Overall amounts approaching $1,000,000 negotiable