your financial futurethe financial woes of greece are not a new development, as the country has been...

YOUR FINANCIAL FUTUREYour Guide to Life Planning

July 2015

Robert H. JergerCincinnati Investment AdvisorsLLCCERTIFIED FINANCIALPLANNER (TM)550 Wards Corner RoadLoveland, OH 45140513-575-3930Fax: 513-575-3938robert.jerger@lpl.comwww.cincinnatiinvestmentadvisors.com

In This Issue

Bond Market Perspectives | Week of June 29, 2015Municipal supply has been a headwind for much of 2015 but appears to be tapering off aheadof a typical summer slowdown.

Client Letter "Greece: Gauging Potential Market Impacts" |June 2015Regardless of which path Greece takes, its default, or potential exit from the Eurozone, is notlikely to lead to the end of the U.S. economic expansion or the bull market.

Weekly Market Commentary | Week of June 29, 2015We do not believe transports weakness is a signal of an impending economic and marketdownturn.

Where You Live Matters: Counting the Cost of Long-TermCareGenworth's annual Cost of Care Survey tracks the costs of nursing homes, assisted-livingfacilities, and home-based care across the country.

Client Letter | Midyear Outlook 2015: Some AssemblyRequiredThe recently released LPL Research Midyear Outlook 2015 publication contains the insightsand guidelines to put together portfolio strategies for the rest of 2015.

2 Your Guide to Life Planning

Bond Market Perspectives | Week of June 29, 2015

KEY TAKEAWAYS

Municipal supply has been a headwind for much of 2015 but appears to be tapering off ahead of atypical summer slowdown.Over the longer term, still tight state budgets may keep broader municipal supply restrained and limitgrowth of the overall municipal bond market, which could become a tailwind.Despite the constant flow of negative headlines, primarily from Puerto Rico, the overall credit quality ofthe municipal market appears to be on solid footing.

STATE OF THE STATES

July 1 is the beginning of the fiscal year for 46 of 50 states and the ability of states to get budgets approved isimperative, as a delay could impair states' abilities to make timely interest and principal payments on theirdebt obligations.

SUPPLY AND DEMAND

Municipal supply has been a headwind for much of 2015 but appears to be tapering off ahead of a typicalsummer slowdown. New issuance, as measured by 30-day visible supply calendar, has runThe Bond Buyer'swell ahead of the average pace of the prior five years [Figure 1]. As Figure 1 also illustrates, supply is slowingearlier, compared with a seasonal slowdown that typically begins at the start of July.

On a positive note, the bulk of new issuance in 2015 has been due to refinancing, as governments takeadvantage of lower market interest rates. Now, higher interest rates should slow refinancing activity, if it hasnot already done so.

Supply is also likely to be limited as state budgets are still under stress. State revenue has increased steadilysince 2010, but at a slower pace than expenditures. State tax revenue has recovered at the slowest pacefollowing any recession over the last 50 years. Therefore, capacity to take on new debt may still be limited.Over the longer term, still tight state budgets may keep broader municipal supply restrained and limit growthof the overall municipal bond market. This could potentially become a tailwind for investors as demandremains elevated relative to supply.

STATE AUSTERITY

The term "austerity" is linked to Europe, but the positive, albeit slow, recovery in state revenue has led to amild version of state austerity. Per Moody's, the overall state debt backed by taxes, which does not include localgovernment debt or specific revenue projects, actually fell in 2014 for the first time in 28 years. Moody'sprediction is for state debt levels to stay flat in 2015 but potentially rise over the long term, as overdueinfrastructure spending will be necessary in light of little assistance from the federal government.

The American Society of Civil Engineers estimates that approximately $3.6 trillion in infrastructure repairs


will be necessary by 2020. The figure shows that state and local governments have been forgoing road andbridge maintenance for years, while recouping the damage done to revenue during the Great Recession.

Pension obligations continue to pose a long-term threat to state budgets but pension funding has improvedrecently. A study by Boston College's Center for Retirement Research showed that from 2013 to 2014, pensionfunding levels and the payment of required contributions both increased. One driver of modest pensionfunding improvement has been stock market gains. Higher state tax revenue--comprised primarily of income,corporate, and sales taxes--has also helped. However, the slow recovery in corporate taxes means that statesmust remain conservative. Over the long term, potentially with a less accommodating stock market, the burdenof pension obligations may lead to tax hikes, such as those being considered by Pennsylvania, Chicago, andIllinois. Though a potential negative for economic growth, increasing taxes could enhance the allure oftax-advantaged municipal bonds.

PROBLEM ISSUERS STILL ISOLATED

Puerto Rico's government has been unable to agree on a fiscal 2016 budget, which is needed to obtainshort-term funding. Without it, Puerto Rico will likely default on some or most of its debt obligations. A PuertoRico default has been more a question of when (not if) and of how many issuers would be impacted. At thispoint, the broader municipal market has treated Puerto Rico as an isolated event; but the threat of forcedliquidations, although limited, could adversely impact the broader muni markets should liquidations, if any,become disorderly. Puerto Rican bonds have been deeply discounted for some time and we believe the declinesover the last two trading days largely price in a high probability of default.

Despite the constant flow of negative headlines, most recently from Chicago, the state of Illinois, and PuertoRico, the overall credit quality of the municipal market appears to be on solid footing. The number ofmunicipal defaults is on pace to finish 2015 at a historically low level [Figure 2].

Though still above their 20-year averages, average AAA municipal-to-Treasury ratios fell in June, indicatingthat municipal valuations have richened steadily over the month [Figure 3].


The improvement in 30-year valuations has been more pronounced than that of 10-year valuations. Despiterichening, the 10-year AAA municipal-to-Treasury ratio is about 100%, above where it was for much of 2014.The same can no longer be said for the 30-year ratio, suggesting more caution may be warranted on the longend of the municipal curve. Intermediate municipals may provide better value currently, in addition to lessinterest rate sensitivity, and may provide a favorable risk-return trade-off relative to longer-dated municipals.

With the number of defaults low from a historical context, the municipal market may be in a good place toenjoy the tailwind of limited supply through 2015-2016. We find municipals to be one of the more attractiveoptions among high-quality bonds, in what will likely continue to be a low-return environment. Over the nearterm, declining supply and favorable summer seasonality may provide a further tailwind, as July and Augustare historically two of the best performing months for municipal bonds, as the market benefits from the dropoff in supply.

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specificadvice or recommendations for any individual. To determine which investment(s) may be appropriate foryou, consult your financial advisor prior to investing. All performance referenced is historical and is noguarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted and there can be noguarantee that strategies promoted will be successful.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values and yields willdecline as interest rates rise, and bonds are subject to availability and change in price.

Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment ofprincipal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.However, the value of fund shares is not guaranteed and will fluctuate.

Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior tomaturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternativeminimum tax. Federally tax-free but other state and local taxes may apply.

Because of its narrow focus, specialty sector investing, such as healthcare, financials, or energy, will besubject to greater volatility than investing more broadly across many sectors and companies.

Moody's Inc. is an independent, unaffiliated research company that rates fixed income securities. Moody'sassigns ratings on the basis of risk and the borrower's ability to make interest payments. Moody's backs itsratings with exhaustive financial research and unbiased commentary and analysis.

Different agencies employ different rating scales for credit quality. Standard & Poor’s (S&P) and Fitch bothuse scales from AAA (highest) through AA, A, BBB, BB, B, CCC, CC, C to D (lowest). Moody's uses a scalefrom Aaa (highest) through Aa, A, Baa, Ba, B, Caa, Ca to C (lowest).

This research material has been prepared by LPL Financial.


To the extent you are receiving investment advice from a separately registered independent investmentadvisor, please note that LPL Financial is not an affiliate of and makes no representation with respect tosuch entity.

Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | NotGuaranteed by Any Government Agency | Not a Bank/Credit Union Deposit

Tracking #1-396770 (Exp. 06/16)


Client Letter "Greece: Gauging Potential Market Impacts" | June 2015

Dear Valued Investor:

Negotiations between Greece and its creditors over the weekend of June 27 ended without a deal, which willlead Greece to default on its 1.6 billion euro loan payment due to the International Monetary Fund (IMF) today(June 30). The decision by the Greek government to reject the latest offer by the so-called Troika--comprisedof the IMF, European Central Bank (ECB), and European Commission--of reforms in exchange for fresh rescuefunds or a bailout extension has made a Greek exit from the Eurozone a real possibility. In response, the Greekgovernment has instituted capital controls, closed banks and stock exchanges, and limited ATM withdrawals tokeep deposits from leaving the country. However, this unfortunate development leaves Greece's future in theEurozone currency union in question, something that is understandably of concern to investors and markets.

The financial woes of Greece are not a new development, as the country has been the epicenter of Europe'sdebt crisis starting with the Great Recession in 2008. Since then, efforts have been made to mitigate Greece'sfinancial problems: Private bank holders of Greek debt agreed to a 50% reduction in the face value of that debtin 2011 and the Troika created two sizable bailout programs. These bailout efforts required Greece to makemeaningful fiscal and monetary structural changes, including deep budget cuts and steep tax increases. Afteryears of harsh austerity measures and a troubled economy, Greece appeared to be reversing course in January2015 when Greek voters elected an anti-austerity party led by Prime Minister Alexis Tsipras. The recentstalemate, which caused negotiations to fall apart and the consequent default, has unfolded primarily as aresult of Greece still requiring bailouts and financial relief, and its new political leadership being unwilling toaccept the terms of austerity and responsibility upon which that financial aid is contingent.

A referendum has been called for July 5 to allow the Greek people to have their voices heard. This couldultimately provide clarity if the will of the people is to stay in the Eurozone and accept the conditions that comewith that decision. Regardless, there is no easy or quick path to a resolution here. Bottom line: The situation inGreece is tenuous and, at this point, the odds that the country can find a way to stay in the Eurozone may be nohigher than 50/50.

The most important question is: What does this means for markets? Stock and credit market volatility is likelyto be elevated this week and potentially next, depending on how the Greek people vote and how Europeanpolicymakers react. Regardless of which direction the referendum goes, the impact from Greece defaulting isexpected to be relatively short term and manageable. Over the years, the market has had to digest other defaultscenarios by countries such as Cyprus and Argentina, which have typically resulted in short-term spikes inmarket volatility and a modest pullback in stocks.

The good news about all of the Troika's efforts to prop up Greece since its initial wave of significant debtdowngrades in December of 2009, is that the market, and more importantly, private sector banks, are moreprepared to handle the impacts of a default or even Greece's exit from the Eurozone. There are better centralbank safeguards and the private market exposure to Greek debt has been reduced dramatically over the years.Due to a combination of the modest size of the Greek economy (less than 2% of Eurozone gross domesticproduct as of March 31, 2015), a meaningful improvement in the overall health of the global economy, andbold monetary policy actions by the ECB--including its willingness to "do whatever it takes" to keep theEurozone together and its aggressive bond buying programs--it's expected there will be limited market impactbecause of Greece over the intermediate to long term.

In other words, regardless of which path Greece takes, its default, or potential exit from the Eurozone, is notlikely to lead to the end of the U.S. economic expansion or the bull market. Greece is not another LehmanBrothers moment; simply put, Greece's problems remain Greece's problems. A default by Greece or even itsexit from the Eurozone will potentially have limited ripple effects given the years that central banks, regulators,private business, and investors have had to prepare for this drawn-out, but inevitable, outcome.

The situation in Greece is a fluid one and could offer markets continued concern over the short run. But it istimes like these that showcase the value of a sound, disciplined, and diversified investment strategy. As always,if you have questions, I encourage you to contact me.

The opinions voiced in this material are for general information only and are not intended to provide specificadvice or recommendations for any individual security. To determine which investment(s) may beappropriate for you, consult your financial advisor prior to investing. All performance referenced ishistorical and is no guarantee of future results. Economic forecasts set forth may not develop as predicted.

Investing in foreign and emerging markets securities involves special additional risks. These risks include,but are not limited to, currency risk, geopolitical risk, and risk associated with varying accountingstandards. Investing in emerging markets may accentuate these risks.


This research material has been prepared by LPL Financial, Member FINRA/SIPC.

Tracking # 1-396671 (Exp. 06/16)


Weekly Market Commentary | Week of June 29, 2015

KEY TAKEAWAYS

We do not believe transports' weakness is a signal of an impending economic and market downturn.Historical data suggest transports' underperformance may actually be signaling a buying opportunityfor the S&P 500 rather than a sell.We believe transports present an attractive investment opportunity for the second half of 2015.

DEBUNKING DOW THEORY

Transports have lagged the broad market so far this year, causing many to wonder if that signals an impendingeconomic and market downturn. We do not think so, and our claim is supported by the historical data. As wediscuss transports' efficacy as a leading indicator (so called "Dow Theory"), we provide analysis showing thattransports' weakness in recent decades has actually been a better buy signal for the stock market than a sellsignal, and we reiterate our positive view of the industry.

While the situation in Greece is uncertain and very fluid, we do not expect a potential breakup of the Eurozoneto cause a recession or bear market in the United States, and we would be looking for opportunities to buytransports stocks--or stocks in general--on significant weakness, should it occur.

WHAT IS DOW THEORY?

Concern that weakness in transportation stocks (transports) might be a warning for the broader marketscomes from Dow Theory, one of the oldest applications of technical analysis. First developed more than 100years ago by Charles Dow, founder of and refined by others, Dow developed twoThe Wall Street Journal,averages to measure stock market performance that eventually became today's Dow Jones Industrial andTransportation Averages.

During the Industrial Revolution, these averages provided a good representation of the economy. Today, if youwant confirmation of a trend reversal for the broad S&P 500 Index that gives you a more representative pictureof the U.S. economy, you would not necessarily look to transports, which play a smaller role in the currentmore service-based and technology-driven U.S. economy than they did in Dow's day. You might instead look tothe Nasdaq Composite, which represents the increasingly important "good old American know-how" sector ofthe U.S. economy (see our May 11, 2015, "Watching Wages" and Weekly Economic Commentary, Midyear

). The Nasdaq, in fact, has been a good technical tool to identifyOutlook 2015: Some Assembly Requiredchanging market trends in recent decades. You might also look for broader confirmation and include the entireindustrials sector and small caps.

Dow did speculate that railroads would likely lead industrials, since rail activity can show demand for the rawmaterials needed to drive a manufacturing economy. But in today's economy, we think the Institute for SupplyManagement's (ISM) Purchasing Managers' Index (PMI) offers a better indicator, because purchasingmanagers serve as bellwethers for changing demand for manufacturing inputs (and are not subject to fickleshifts in market sentiment). For this reason, the ISM's PMI is one of LPL Research's favorite early indicators ofpotential changes in earnings trends and one of our Five Forecasters, as cited in our Midyear Outlook 2015,which we believe collectively can provide useful warning signals of an impending economic and marketdownturn.

IS TRANSPORTS' WEAKNESS A MARKET SIGNAL?

Transports have had a rough start to 2015. Year to date, the S&P 500 Transports Index is down about 14%,compared with the 2% advance for the S&P 500 Index [Figure 1]. The industry's weakness has sparked thequestion of whether this deteriorating performance is a signal of an impending economic and marketdownturn.

Click here for Figure 1, Transports Have Underperformed Significantly in 2015.

To answer this question, we analyzed prior periods in which the transports industry, represented by the DowJones Transportation Index, underperformed the Dow Jones Industrial Index by 10 percentage points or more(year to date the Dow Jones Transportation Index has underperformed the Dow Jones Industrial Index byapproximately 10%). We use the Dow Transports because the index has a longer history (the S&P 500Transportation Index was created in 1995) and to be consistent with Dow Theory, but we get similar resultswhen using the S&P 500 industry data over the past 20 years. We test this signal against the S&P 500 Index,which better represents the broad market.

Looking back at historical price data to 1975, Dow Transports Index underperformance has not signaled stockmarket corrections. In fact, we have seen the opposite. Over the past 40 years, the Dow Transports Index hasunderperformed the Dow Industrials Index by 10% or more 11 different times. After the relative "loss" reached

http://lpl-research.com/NOD/WMC_062915_FIG1.pdf


the 10% threshold, over the next 6 months, the S&P 500 rose by an average of 13%, and was higher 10 out of 11times. Over the next 12 months, the S&P 500 rose by an average of 18.5%, and was also higher 10 out of 11times. The data clearly show that transports' weakness is far from a reliable signal of impending marketweakness. In fact, if anything, it could be considered a contrarian buy signal. The data for the last 8 instances,with performance 3, 6, and 12 months after the big underperformance, are shown in Figure 2.

Click here for Figure 2, Transports' Underperformance Could Be More of a Buy Signal Than a Sell Signal.

WE STILL LIKE THE TRANSPORTS INDUSTRY

Beyond the evidence above, which suggests a transports turnaround, we like the industry for several otherreasons:

Economic snapback. Fewer weather disruptions and the resolution of the port strikes have helped theeconomy pick up some speed during the second quarter. Meanwhile, although the strong U.S. dollar remains adrag on both U.S. exports and earnings derived overseas, better economic growth in Europe and Japan arebenefiting the global growth picture, which we expect to drive more demand for transportation services overthe rest of the year. U.S. gross domestic product (GDP) growth is tracking to near 3% for the nearly completedsecond quarter.

Energy cost savings. Transports are both helped and hurt by lower commodity prices, but we think thebenefits outweigh the costs. In the "The Bright Side of Cheap Oil" (January 12,Weekly Market Commentary,2015), we noted that fuel represents about one-third of airline industry costs (20% of the S&P 500Transportation Index), about 20% for rails (45% of the index), and nearly 10% for the big shippers (10-15% ofthe index). Contrast that with the fact that only 3-4% of rail traffic is petroleum related (including frackingsand), and you can see that lower fuel costs, even with some fuel hedging activity, more than outweigh thereduced oil exploration due to lower oil prices.

The bigger problem--though one that we think the rails can overcome--is coal, which represents 17% of U.S.rail traffic and is seeing double-digit annual volume declines. The regulatory environment for coal will not geteasier anytime soon, but natural gas (coal's primary competitor as a power generator) has stabilized and pricesare starting to move higher, which may help improve the outlook for coal demand.

Airline industry discipline. Airlines have long had a reputation for a lack of financial discipline and theirhistory is littered with bankruptcies. Many airlines have overexpanded ahead of recessions and engaged infinancially damaging price wars. But the group's prospects are very different today. In addition to the costbenefit form cheap fuel, the financial crisis provided a catalyst for the industry to become more efficient, loweroperating costs, and boost margins. Industry consolidation has helped improve capacity and pricing discipline.And new fees have driven additional revenue. We do not believe the market is giving this group enough creditfor these positives.

Attractive valuations. The decline in transports this year has left valuations very attractive. In fact, based onthe forward price-to-earnings ratio (PE) relative to the S&P 500, the group is the cheapest it has been in 15years [Figure 3]. We would argue you have to go back 20 years (1995-1996) to find a period when transportswere cheaper on a relative basis, given that relative valuations during the internet bubble were skewed byexcessive technology valuations (everything non-tech looked cheap in comparison). Given the group's earningsgrowth outlook--consensus is calling for a more than 30% increase in earnings growth from the S&P 500Transportation Index in 2015--we find transports' valuations compelling.

Click here for Figure 3, Relative to the S&P 500, Transports Are More Attractively Valued Than They HaveBeen in 15 Years.

CONCLUSION

Don't be scared out of the stock market by Dow Theory. The historical data suggest the transports'underperformance may actually be signaling a buying opportunity for the S&P 500 rather than a sell. We findother leading indicators in today's economy to be more effective signals of market downturns, and theycontinue to suggest--despite the crisis in Greece--that the bull market and economic expansion are set tocontinue through 2015 and beyond.

We believe transports present an attractive investment opportunity for the second half of 2015, given theunfolding snapback in the U.S. economy, still low energy costs, the improved positioning of the airlineindustry, and attractive valuations. Greece-related weakness may present an even more attractive buyingopportunity for this group. Potential declines in commodity shipments, including crude oil and coal, are a risk,as is Europe, but we believe much of this risk is sufficiently discounted in valuations at this point.

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specificadvice or recommendations for any individual. To determine which investment(s) may be appropriate foryou, consult your financial advisor prior to investing. All performance referenced is historical and is no





guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted and there can be noguarantee that strategies promoted will be successful.

Price-to-earnings ratio is a valuation ratio of a company’s current share price compared to its per-shareearnings.

All investing involves risk including loss of principal.

INDEX DESCRIPTIONS

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measureperformance of the broad domestic economy through changes in the aggregate market value of 500 stocksrepresenting all major industries.

The Institute for Supply Management (ISM) Index is based on surveys of more than 300 manufacturingfirms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment,production inventories, new orders, and supplier deliveries. A composite diffusion index is created thatmonitors conditions in national manufacturing based on the data from these surveys.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the NewYork Stock Exchange and the Nasdaq.

This research material has been prepared by LPL Financial.

To the extent you are receiving investment advice from a separately registered independent investmentadvisor, please note that LPL Financial is not an affiliate of and makes no representation with respect tosuch entity.

Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | NotGuaranteed by Any Government Agency | Not a Bank/Credit Union Deposit

Tracking #1-396232 (Exp. 06/16)


While the impact oflong-term care can bestaggering on one'sfinances, it can alsotake a significant tollon families andcareers.

Where You Live Matters: Counting the Cost of Long-Term Care

It probably comes as no surprise that the cost of long-term care services -- including nursing homes,assisted-living facilities, and home-based care -- continues to rise steadily across the country.

Among the various services tracked by Genworth's annual , home-based care costs areCost of Care Surveyrising at a slower pace than other forms of care. Specifically, Genworth's most recent report found that, on anational basis, home-based care rose just 1% to 1.5% over the last five years, while costs at nursing homes andassisted-living facilities have increased 2.5% to 4% over the same five-year period.1

Genworth also tracks long-term care cost data on a regional and state-by-state basis. For planning purposes --either your own or for an aging parent or other loved one -- this is vital information to know and discuss withyour financial professional when forecasting retirement income scenarios.

Following are the 10 most expensive states for a private room in a nursing home -- the top-of-the-line caretracked by the annual study -- and the most expensive mode of care available today. Along with the medianannual cost for each state is the comparable median annual cost for home health aide services.

Top 10 States for Cost2

State Median Annual Nursing HomeCost (private room)

Median Annual Home HealthAide Cost

1. Alaska $281,415 $59,488

2. Connecticut $158,775 $50,336

3. Massachusetts $139,580 $57,200

4. New York $136,437 $52,624

5. Hawaii $135,050 $56,056

6. New Jersey $127,750 $48,506

7. New Hampshire $122,275 $54,912

8. Delaware $117,895 $50,336

9. Pennsylvania $113,150 $47,911

10. Maryland $110,230 $45,760

National Median Cost $91,250 $45,760

Is your state among the most expensive listed above? If not, review the toGenworth 2015 Cost of Care Surveyfind cost information for all types of long-term care services in your state.

While the impact of long-term care can be staggering on one's finances, it can also take a significant toll onfamilies and careers. To learn more about strategies for coping with this potential need, speak with yourfinancial advisor.

, "LTC: 10 Most Expensive States for Nursing Homes," April 27, 2015.1Financial Planning

https://www.genworth.com/dam/Americas/US/PDFs/Consumer/corporate/130568_040115_gnw.pdf


Client Letter | Midyear Outlook 2015: Some Assembly Required

Dear Valued Investor:

The recently released publication contains the insights and guidelines toLPL Research Midyear Outlook 2015put together portfolio strategies for the rest of 2015.

Few things can dampen the excitement of seeing the delivery of a long-awaited package on the porch thanthree words--"some assembly required." Like any complex assembly, whether it's a 1,000-piece puzzle, a kid'sshiny new bike, or a plan to navigate tricky economic times, the amount of pieces to collect and put togethercan be daunting. But the assembly can certainly be made easier with a well-formulated plan, the right tools,and the as the blueprint for success.LPL Research Midyear Outlook 2015: Some Assembly Required

The economy has helped deliver six consecutive calendar years of positive returns for stocks since the end ofthe 2008-2009 Great Recession, as measured by the S&P 500 Index; however, constructing a strategy for theremainder of the economic expansion will require a tricky assembly. Divergent monetary policies reveal anuneven global recovery that has triggered an uptick in stock market volatility. A few important pieces requiringassembly for the remainder of 2015 include:

How the U.S. economy pieces together the components needed to bounce back from alackluster start of the year. The U.S. economy hit an unexpected soft patch to start the year due toa severe winter freeze, the West Coast port strikes, ongoing effects of lower oil prices, and the surgingU.S. dollar. Returning to a more normalized 3% growth level will be crucial to build further upon themarket's first half gains.After successfully delivering the U.S. economy out of the recessionary "warehouse," howdoes the Federal Reserve (Fed) assemble an exit strategy from its six-year policy of zerointerest rates? With unprecedented levels of accommodative monetary policy rendering anytraditional instruction manual pointless, the Fed will have to use its entire toolbox to construct adelicate increase in interest rates without disrupting the fragile economic growth and the waveringconfidence of businesses, consumers, and investors.Corporate earnings growth continues to search for that spark to ignite equity advances.In the U.S., lackluster profits aligned with weak first quarter 2015 economic growth to produce thelowest level of year-over-year corporate earnings growth in 11 quarters. Overseas markets are lookingfor a power boost from the very accommodative monetary policies of global central banks acrossEurope and Asia, in an attempt to spur sustainable growth, improve earnings, and avoid deflationaryforces.

Although many packages are still in transit as we approach the midpoint of 2015, the biggest challenge for themarket is putting the necessary pieces together to construct the backdrop for solid global economic growth,stable prices and currencies, and expanding corporate profits. The task is complicated by the Fed's expectedfirst interest rate increase in nine years later this year. The assembly will not be an easy one, but the LPL

provides the investment instruction manual, tools,Research Midyear Outlook 2015: Some Assembly Requiredand tactics to construct portfolio strategies that may flourish in a market that remains in transition.

As always, if you have questions, I encourage you to contact me.

The opinions voiced in this material are for general information only and are not intended to provide specificadvice or recommendations for any individual security. To determine which investment(s) may beappropriate for you, consult your financial advisor prior to investing. All performance referenced ishistorical and is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly.

The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of thebroad domestic economy through changes in the aggregate market value of 500 stocks representing allmajor industries.

Economic forecasts set forth may not develop as predicted.

This research material has been prepared by LPL Financial, Member FINRA/SIPC.

Tracking # 1-392482 (Exp. 06/16)

http://lpl-research.com/outlook/Midyear-Outlook-2015_Spread.pdf

http://lpl-research.com/outlook/Midyear-Outlook-2015_Spread.pdf

The opinions voiced in this material are for general information only and are not intended to provide specificadvice or recommendations for any individual. To determine which investment(s) may be appropriate foryou, consult your financial advisor prior to investing. All performance referenced is historical and is noguarantee of future results. All indices are unmanaged and cannot be invested into directly.

Robert H. Jerger is a Registered Representative with and Securities offered through LPL Financial, MemberFINRA/SIPC

your financial futurethe financial woes of greece are not a new development, as the country has been...

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