First Quarter 2014 Market Overview

1. First Quarter 2014 Market Overview Presented by Ruth M. Matt, CFP ®Fore River Financial, 22 Free St, Suite 201, Portland, ME 04102 207-450-5032

2. Economic Summary: First Quarter 2014 • Milestones • Equity markets hit all-time high (again) • Russia annexes Crimea, sparking outcry from the West • Janet Yellen eases up on dovish position in latest speech • Fed tapering continues as expected • Companies worldwide gain confidence to increase spending • Debt limit raised, ending threat of government shutdown • U.S. support builds for sale of gas to Europe, Ukraine • EU and U.S. resume trade talks, following NSA spying • American Airlines returns to Wall Street • Investors eye Chinese stimulus Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results.

3. Economic Themes • Equity/fixed income • Housing • Credit and banking • Employment • Consumer behavior • Business and manufacturing activity Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results.

4. Q1 2014: Equity Returns by Style Source: Commonwealth Asset Management/Morningstar Direct Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

5. Q1 2014: S&P 500 Sector Valuations Source: Commonwealth Financial Network/Bloomberg Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

6. Q1 2014: Global Equity Valuations Source: Commonwealth Financial Network/Bloomberg Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

7. Fixed Income

8. Q1 2014: Fixed Income Returns by Style Source: Commonwealth Asset Management/Morningstar Direct Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

9. Treasury Yields Yield up = Price down

10. Direction of Rates? 3%

11. Fixed Income Past performance is no guarantee of future results.

12. Fixed Income continued Announcement Past performance is no guarantee of future results.

13. Housing

14. Housing: Prices and Supply

15. Housing: Prices and Supply continued

16. Housing: Prices and Supply continued

17. Credit and Banking

18. Credit and Banking: TED Spread European Crisis

19. Credit and Banking: Inflation

20. Employment

21. Change in Nonfarm Payrolls Strong! Source: Commonwealth Asset Management/Bloomberg

22. Unemployment Rate

23. Average Weekly Hours

24. Business and Manufacturing

25. ISM Manufacturing Robust!

26. Capacity Utilization

27. Economic Expansion

28. Industrial Production

29. Federal Surplus/Deficit

30. Federal Debt

31. Conclusions • Job growth was strong in Q1; unemployment fell to 6.7%. • Some softening on the ISM front, though still positive. • The housing recovery is still progressing, but pricing may slow in the near term. • GDP growth is expected to continue, with 2014 projections hovering in the 3% range. • Average weekly hours higher, fueling talk of wage inflation. • High-yield spreads are very tight. • Interest rates appear to be somewhat fairly valued. • Municipals witnessed strong rebound after lackluster 2013.

32. Looking Forward . . . • Key themes to monitor • Yellenand tapering in 2014 • Earnings season for Q1 (beat or miss estimates?) • Will the influx in housing inventory curtail price increases? • Is the ECB going to institute much-anticipated quantitative easing • Election season in the latter half of the year • Direction of Treasury over the near term • Tight credit spreads across the board • Are emerging market equities poised for a rebound?

33. Disclosure Investing involves risks, including loss of principal amount invested due to market fluctuations. All indices are unmanaged, and investors cannot invest directly in an index. Past performance is not indicative of future results. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. The Bank of America Merrill Lynch US Corporate Index tracks the performance of U.S. dollar-denominated investment-grade corporate debt publicly issued in the U.S. domestic market. The Merrill Lynch Municipal Master Index tracks the performance of U.S. dollar-denominated investment-grade tax-exempt debt publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market. The Bank of America/Merrill Lynch High Yield Master II Index tracks the performance of U.S. dollar-denominated below-investment-grade corporate debt publicly issued in the U.S. domestic market. International investing involves special risks such as currency fluctuation and political instability. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions. High-yield/junk bonds invest substantially in lower-rated bonds and are issued by companies without long track records of sales and earnings or by those with questionable credit strength. There is a greater possibility that adverse changes in the economy or poor performance by the issuers of these bonds may affect the ability to pay principal and interest. High-yield bonds involve substantial risks, tend to be more volatile, and, therefore, may not be suitable for all investors. Municipal bonds are federally tax-free but may be subject to state and local taxes, and interest income may be subject to federal alternative minimum tax (AMT). The purchase of bonds is subject to availability and market conditions. There is an inverse relationship between the price of bonds and the yield: when price goes up, yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity. Some bonds have call features that may affect income. Emerging market investments involve higher risks than investments from developed countries and also involve increased risks due to differences in accounting methods, foreign taxation, political instability, and currency fluctuation.