Peter C. Karp Karp Capital Management October 24, 2012

1. Peter C. Karp Karp Capital Management October 24, 2012 SIR's Area 2 $ums Investment Group “Turning on a Dime” 1

2. Agenda • Global growth is slowing • European debt problems • Are we experiencing inflation or deflation? • Strong Dollar • The fear of the future problem of the U.S. Treasury debt • Karp Capital Management – Who we are • Summary

3. Negative Headlines… ….Cast Clouds Over The Market Disappearance of AAA Insurance Harrisburg, PA Chapter 9 Higher Volatility Stockton, CA Downgrades Low Rate Environment Market Complexity Tax Reform Property Tax Declines Budget Deficit Credit Risk State Aid Cuts OPEB Reform Ratings Migration Deficit Financing Vallejo, CA Political Stalemate Pension Reform Jefferson County, AL Issuer Transparency Liquidity Dodd-Frank Act Volcker Rule Meredith Whitney Fiscal Cliff Falling Revenues Tax Reform

4. Major Drivers In Washington, DC • Fiscal Cliff • Regulatory Agendas • 2012 Elections

5. Most Likely Scenario Majorities in the House and Senate will be very small regardless of who wins control in each chamber

6. What Is The Fiscal Cliff? Could result in a 3%-5% drag on GDP Scheduled tax hikes and spending cuts = up to $606 billion Could cause a 20% to 30% decline in corporate profits Bush-era tax cut expiration $221 billion Could drive unemployment up to 9 percent Payroll tax relief & extended unemployment insurance $121b Other changes $116b But, continuing on current path, could result in debt reaching 90% of GDP by 2022… Budget sequester $65b Tax extenders $65b Healthcare reform taxes $18b Sources: Congressional Budget Office/Fidelity and other economists.

7. Potential Tax Rate Impact * Includes 3.8% tax on unearned income from the federal healthcare law and reinstatement of the personal exemption and itemized deduction phase outs.

8. What To Expect In The Next Few Months Election day President proposes FY 2014 budget “Lame Duck” session of Congress Fiscal year 2013 begins New Administration & Congress Holidays Thanksgiving October November December January February Debt ceiling reached “Fiscal cliff”

9. Mutual Funds and ETFs Since December 2007, investors have favored fixed–income securities, plowing over 1.1 trillion of net flows into bond mutual funds and ETFs while equity funds have only received around $33 billion..

10. Current valuations… …suggest decent return expectations.

11. Today’s Flows May Offer… …Only Low Yields and Low Diversification

12. Consider What Can Happen When You… …Introduce Non-Traditional Asset Classes

13. Karp Capital Management • Ranked one of the top 25 Wealth Advisors in the Bay Area • Over $170MM in Assets Under Management • Access to top Financial Institutions & Service Providers • Portfolios Designed & Managed In-house for Individuals, Qualified & Non-Qualified Retirement Plans • Single Point of Contact to Manage your Investments • Unbiased Advice, No Hidden Agendas or Competing Objectives • Local Personalized Service and Customized Solutions • Total Fee Transparency – Documented by ADV Form, requirement of SEC

14. Contact Peter C. Karp Karp Capital Management San Francisco, CA Tel: (415) 345-8185 1-877-900-KARP peter@karpcapital.com karpcapital.com Although information in this document has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness, and it should not be relied upon as such. All opinions and estimates herein, including forecast returns, reflect our judgment on the date of this report and are subject to change without notice. Such options and estimates, including forecast returns, involve a number of assumptions that may not prove valid. Further, investments in international markets can be affected by a host of factors, including political or social conditions, diplomatic relations, limitations or removal of funds or assets, or imposition of (or change in) exchange control or tax regulation in such markets. The past performance of securities or other investments does not necessarily indicate or predict future performance, and the value of investments and income arising there from can fall as well as rise; the investor may get back less than what was invested; and no assurance can be given that any portfolio or investment described herein would yield favorable investment results. We or our associated persons may act upon or use material in this report prior to publication. This document may not be reproduced or circulated without our written authority.