1. Investment Outlook
“And believe me, it will be enough.”
June 13, 2013

2. Cyprus bailout = bank deposits confiscation

3. US savers experience stealthy confiscation
Average T-Bill
Yield
Average Inflation
Real Yield
(nominal less
inflation)
1980s 8.9 5.1 +3.8
1990s 4.9 2.9 +2.0
2000s 2.8 2.5 +0.3
Today, the picture looks very different1:
Today 0.1 1.8 -1.7
110 Year Treasury Bond yield and forward expected CPI
as of 12/31/2012 (Sources: Board of Governors of the Federal Reserve System and Bureau of Labor
Statistics)

4. US savers experience stealthy confiscation
Average 10 YR
Treasury Bond
Yield
Average Inflation
Real Yield
(nominal less
inflation)
1980s 10.6 5.1 +5.5
1990s 6.7 2.9 +3.8
2000s 4.5 2.5 +2.0
Today, the picture looks very different1:
Today 2.2 2.8 -0.6
110 Year Treasury Bond yield and forward expected CPI
as of 12/31/2012 (Sources: Board of Governors of the Federal Reserve System and Bureau of Labor
Statistics)

5. 30 Year Bond Bull Market is over

6. Game Plan
•Avoid Long Maturities
•Beware of Bond Index Funds
•Consider Flexible Strategies
•Don’t stretch for Yield
•Consider mortgage backed securities
•Investment globally
•Consider alternatives
•Think outside the box

7. Portfolio Positioning – Fixed Income

8. Portfolio Positioning – Equities

9. Main Takeaways
• At this point in time, we believe investors should not rely on government bonds for income
and safety to the extent they have done in the past
• Central banks pushed yields down below inflation, in order to neutralize the financial crisis
• Central bank action has succeeded in bringing the financial crisis to an end, as well as
helped increase the value of stocks and real estate
• Government bond yields have slid from more than 15% in 1981 to less than 2% in 2013.
• While a significant rise in bond yields is not imminent, it will likely occur when the
employment situation improves. A rise in bond yields will result in lower bond prices.
• Various bonds may react very differently to a potential rise in yields.
• We have identified and implemented specific strategies to help our clients navigate through
the current environment.
• We also stand ready to help other people and organizations that our clients care about to
achieve their financial goals

10. Disclosures
NOTE: The actual investment vehicles used to gain exposure to various investment sectors mentioned above vary
along with the unique circumstances of every client portfolio(s)
Government bonds and treasury bills are guaranteed by the US government as to the timely payment of principal
and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
This material contains the current opinions of the author, which may be subject to change without notice.
Forecasts, estimates and certain information contained herein are based upon proprietary research and should not be
considered as investment advice or a recommendation of any particular security, strategy or investment product to any
individual investor.
Past performance is no guarantee of future returns. A word about risk: Equities may decline in value due
to both real and perceived general market, economic and industry conditions. Investing in the bond market is subject
to certain risks including market, interest rate, issuer credit and inflation risk; investments may be worth more or less
than the original cost when redeemed. Investing in foreign denominated and/or domiciled securities may
involve heightened risk due to currency fluctuation, economic and political risk, which may be enhanced in emerging
markets. Mortgage and Asset –backed securities may be sensitive to changes in interest rates, subject to early
repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while
generally supported by some form of government or private guarantee, there is no assurance that private guarantors will
meet their obligations. High-Yield, lower rated, securities involve greater risk than higher rated securities;
portfolios that invest in them may be subject to greater levels of credit and liquidity risks than portfolios that do not.
Diversification does not ensure against loss. There is no guarantee that these investment strategies will work under
all market conditions or are suitable for all investors. Each investor should evaluate their ability to invest long-
term, especially during periods of downturn in the market. No strategy assures success or protects against loss.
Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. All
performance information referenced within is historical and is no guarantee of future results.