Barry Mendelson CFP®

Quarterly Market Review

Barry Mendelson, CFPPresident & Financial Advisor

1399 Ygnacio Valley Road, Suite 24 yFourth Quarter 2011Walnut Creek, CA 94598

925‐348‐5852   barry@elevationwm.comelevationwm.com

U.S. & International Market SummaryF th Q t 2011Fourth Quarter 2011

/Global 1‐5 Year Bonds 

+0 4%

Emerging MarketsStocks

+4 4%

Int’l Small Stocks

+0 7%

Int’l Value Stocks

+3 0%

U.S. REIT Stocks

+15 4%

U.S. Small Cap Stocks

+15 5%

U.S. Value Stocks

+13 1%

U.S. Large Company Stocks

+11 8%

U.S. Gov/ Credit 1‐3 Year Bonds 

+0 2%+0.4%+4.4%+0.7%+3.0%+15.4%+15.5%+13.1%+11.8% +0.2%

BONDSU.S. STOCKS INTERNATIONAL STOCKS

Source: Morningstar Direct 2012. Market segment (Index representation) as follows: U.S. Large Company Stocks (S&P 500 Index); U.S. Small Company Stocks (Russell 2000 Index), U.S. Value Stocks(Russell 1000 Value Index). U.S. Real Estate Market (Dow Jones U.S. Select REIT Index), International Developed (MSCI EAFE Index (net div.)), Emerging Markets (MSCI Emerging Markets Index(gross div)), Global Bonds (Citi WGBI 1-5 Yr Hdg USD), US Bonds (BofA ML Corp & Govt 1-3 Yr TR). Source: Morningstar Direct. Indexes are unmanaged baskets of securities that are not available fordirect investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Allinvestments involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting andfinancial reporting.

U.S. and International Market IndexesReturns through December 31, 2011, Annualized for 5 and 10 Year Periods

Quarterto-Date

%One Year

%Five Years

%Ten Years

%

S&P 500 Index 11.8 2.1 -0.3 2.9

Russell 3000 Index 12.1 1.0 0.0 3.5

Russell 1000 Value Index 13.1 0.4 -2.6 3.9

Russell 2000 Index 15.5 -4.2 0.2 5.6

Dow Jones U.S. Select REIT Index 15.4 9.4 -2.0 10.1

MSCI World Ex. U.S. Value Index 3.0 -11.7 -5.5 5.5

MSCI World Ex U S Small Cap Index 0 7 15 8 3 2 9 4MSCI World Ex. U.S. Small Cap Index 0.7 -15.8 -3.2 9.4

MSCI Emerging Markets Index 4.4 -18.4 2.4 13.9

WGBI 1-5 Years Hedged 0.4 2.3 3.9 3.6

B fA M ill L h U S C /G t I d 1 3 YBofA Merrill Lynch U.S. Corp/Govt Index 1-3 Years 0.2 1.6 3.9 3.6

Source: Morningstar Direct 2012. Market segment (Index representation) as follows: U.S. Large Company Stocks (S&P 500 Index); U.S. Small Company Stocks (Russell 2000 Index), U.S.Value Stocks (Russell 1000 Value Index). U.S. Real Estate Market (Dow Jones U.S. Select REIT Index), International Developed (MSCI EAFE Index (net div.)), Emerging Markets (MSCIEmerging Markets Index (gross div)) Global Bonds (Citi WGBI 1-5 Yr Hdg USD) U S Bonds (BofA ML Corp & Govt 1-3 Yr TR) Source: Morningstar Direct Indexes are unmanaged baskets of

3

Emerging Markets Index (gross div)), Global Bonds (Citi WGBI 1-5 Yr Hdg USD), U.S. Bonds (BofA ML Corp & Govt 1-3 Yr TR). Source: Morningstar Direct. Indexes are unmanaged baskets ofsecurities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance isnot a guarantee of future results. All investments involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreigntaxes, and different methods of accounting and financial reporting.

S&P 500 Daily Performance in 2011

S&P 500 Performance 2011 Aug 9: “If U.S. D 5Slides Into 

Recession, S&P 500 

Could Drop to 830” 4

Dec 5: “DeMark: S&P 500 at 1,330 by 

Christmas” 7Oct 31: MF Global 

Bankruptcy5

Jun 8: Bill Gross: 

Mar 20: “Crises inJan 9: All 30 

Dec 24: Wall St. Experts think stock 

prices will rise by more than 

Nov 29: American Ai li

“Treasury Investors will get cooked” 3

Crises in Japan ripple across global economy”2

Experts Surveyed 

predict positive year of +10.6%1

10% in 2012. 8Airlines Bankruptcy6

Data source: Yahoo Finance. 1: “Stock outlook for 2011: Recovery rally will continue”, CNN Money, 1/9/11, 2: “Crises in Japan Ripple Across the Global Economy”, The New York Times, 3/20/11, 3: “Bill Gross: Treasury investorswill ‘get cooked’”, CNN Money, 6/8/11, 4: “If U.S. Slides Into Recession, S&P 500 Could Drop to 830”, Forbes, 8/9/11, 5: “The Unraveling of MF Global”, The Wall Street Journal, 12/31/11, 6: “American Airlines Parent AMR Files forBankruptcy”, Bloomberg, 11/29/11, 7: “DeMark: S&P 500 at 1,330 by Christmas”, Bloomberg, 12/5/11, 8:, “Pros See Stocks up in 2012, but Big Risks too”, Associated Press, 12/24/11. Indexes are unmanaged baskets of securitiesthat are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. All investmentsinvolve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and financial reporting.involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and financial reporting.

International Returns

International diversification is still key

Individual Country Returns 2011Individual Country Returns 2011

Data source: Morningstar Direct. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actualportfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, anddifferent methods of accounting and financial reporting. Diversification neither assures a profit nor guarantees against loss in a declining market.

Diversify Effectively

Ranking of Markets Around the World

1. Colombia 2. Indonesia3. Peru

24. New Zealand25. Hungary26. Poland

Ranking of Markets Around the WorldTen‐Year Performance in US DollarsAnnualized Returns Year Ending December 31, 2011

4. Czech Republic5. Egypt6. Thailand7. Brazil 8. South Africa9 Chile

27. Sweden28. Hong Kong29. Switzerland30. Spain31. Israel32 Austria9. Chile 

10. India 11. China12. Mexico13. Morocco14. Russia 

32. Austria33. United Kingdom34. Germany35. Taiwan36. Netherlands 37. Japan

15. Malaysia16. Philippines17. Korea18. Norway 19. Australia

p38. France39. USA40. Portugal41. Belgium 42. Italy 

20. Turkey21. Singapore 22. Canada23. Denmark

43. Finland 44. Ireland45. Greece 

Source: MSCI 2011 Map reflects countries in the MSCI provisional All Country World Index MSCI All Country World Small Cap Index and MSCI Frontier Markets Index Indexes are unmanaged baskets of securities that are not Source: MSCI 2011. Map reflects countries in the MSCI provisional All Country World Index, MSCI All Country World Small Cap Index, and MSCI Frontier Markets Index. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and financial reporting. Diversification neither assures a profit nor guarantees against loss in a declining market.

Annual Returns

Historical Annual Return, S&P 500

Lower than average, but still positive

,1972‐2011

2011: +2.11%

Data source: Yahoo! Finance, returns of S&P 500. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with themanagement of an actual portfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal.

Quarterly Volatility

One of the worst historic quarterly returns was followed up by one of the best

Historical Quarterly Return, S&P 500

Q4: 

1972‐2011

+11.82%

Q3: ‐13.87%

Data source: Yahoo! Finance, returns of S&P 500. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with themanagement of an actual portfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal.

Bull and Bear MarketsS&P 500 Inde (USD)S&P 500 Index (USD)

Monthly Returns: January 1926–June 2011

116 mos.491%491%

92 mos.355%Months = Duration of Bull/Bear Market

% T t l R t f th B ll/B M k t

Average Duration

Bull Market: 32 MonthsBear Market: 11 Months

Average Return

Bull Market: 119%Bear Market: ‐27%

44 mos.193%

2 mos.92%6 mos

49 mos.210%

61 mos.282%

% = Total Return for the Bull/Bear Market

6 mos.100%3 mos.26%4 mos.12%

23 mos.133%

9 mos.61%5 mos.22%

48 mos.105% 43 mos.

90%26 mos.52%

30 mos.76%

9 mos.55%15 mos.35%

33 mos.86% 30 mos.

71%24 mos.63%

61 mos.108%

6 mos.‐30%

2 mos.13 mos.‐50%

4 mos.‐16%31 mos

6 mos.‐22%

5 mos.12%

7 mos.‐10%5 mos.15%

6 mos.‐22%

8 mos.‐16% 19 mos.

‐29% 21 mos.‐43%

3 mos.‐11%

14 mos.‐14%

20 mos.‐17% 3 mos.

‐30%

5 mos.‐15%

2 mos.‐15%

25 mos.‐45% 16 mos.

Jun 2011-8%

‐19%6 mos.‐21%

4 mos.‐10%

34 mos.‐83%

50% 31 mos.‐30%

‐15% ‐51%Feb 2009

Indices are not available for direct investment; its performance does not reflect the expenses associated with the management of an actual portfolio.  Past performance is no guarantee of future results. The S&P data are provided by Standard & Poor’s Index Services Group. Bull and bear markets are defined in hindsight using cumulative monthly returns. A bear market (1) begins with a negative monthly return, (2) must achieve a cumulative return less than or equal to ‐10%, and (3) ends at the most negative cumulative return prior to achieving a positive cumulative return. All data points which are not considered part of a bear market are designated as a bull market.

Size and Value Effects Are Strong around the WorldAnnual Index Data

Annualized Compound Returns (%)

US Large Value

S&P 500

US Large

Growth

US Small Value

CRSP 6-10

US Small

GrowthIntl.

ValueIntl.

SmallMSCI EAFE

Intl. Growth

Emg. Markets

Value

Emg. Markets

Small

Emg. Markets “Market”

Emg. Markets Growth

US Large Capitalization Stocks

1927 2010

US Small Capitalization Stocks

1927 2010

Non-US Developed Markets Stocks

1975 2010

Emerging Markets Stocks

1989 20101927–2010 1927–2010 1975–2010 1989–2010

14.03 11.88 11.35 19.17 15.98 13.95 18.48 19.17 13.67 11.29 25.01 21.98 19.46 17.05

27.01 20.51 21.93 35.13 30.94 34.05 24.56 28.13 22.29 22.21 42.01 40.67 36.40 34.89

Average Return (%)

Standard Deviation (%)

In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. US value and growth index data (ex utilities) provided by Fama/French. The S&P data are provided by Standard & Poor’s Index Services Group. CRSP data provided by the Center for Research in Security Prices, University of Chicago. International Value data provided by Fama/French from Bloomberg and MSCI securities data. International Small data compiled by Dimensional from Bloomberg, StyleResearch, London Business School, and Nomura Securities data. MSCI EAFE Index is net of foreign withholding taxes on dividends; copyright MSCI 2011, all rights reserved. Emerging markets index data simulated by Fama/French from countries in the IFC Investable Universe; simulations are free‐float weighted both within each country and across all countries.Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.Past performance is not a guarantee of future results. Values change frequently and past performance may not be repeated. There is always the risk that an investor may lose money. Small company risk: Securities of small firms are often less liquid than those of large companies. As a result, small company stocks may fluctuate relatively more in price. Emerging markets risk:Numerous emerging countries have experienced serious, and potentially continuing, economic and political problems. Stock markets in many emerging countries are relatively small, expensive, and risky. Foreigners are often limited in their ability to invest in, and withdraw assets from, these markets. Additional restrictions may be imposed under other conditions. Foreign securities and currencies risk: Foreign securities prices may decline or fluctuate because of: (a) economic or political actions of foreign governments, and/or (b) less regulated or liquid securities markets. Investors holding these securities are also exposed to foreign currency risk (the possibility that foreign currency will fluctuate in value against the US dollar).

Summary

Contact

Barry Mendelson, CFP®President & Financial Advisor

1399 Ygnacio Valley Rd Suite1399 Ygnacio Valley Rd, Suite Walnut Creek, CA 94598

925‐348‐5852barry@elevationwm.com

elevationwm.com

Disclosures

Opinions expressed are those of Barry Mendelson, CFP® and Elevation Wealth Management.  

This presentation should not be construed as investment adviceThis presentation should not be construed as investment advice.  

The information contained in this presentation is compiled from sources believed to be reliable.

Investments in securities involve the risk of loss.  Past performance is no guarantee of future results.

The markets can remain irrational longer than you can remain solvent.