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1Q13 Stuart and Susan

Preston


Agenda

ƒ Global Market Review ƒ Your WealthPath ƒ Quarterly Portfolio Review


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Global Market Review


Ladies and Gentlemen, the train is leaving the station… As a young boy growing up in New Jersey, I frequently rode the train into New York to visit my father at his office in lower Manhattan. As the train was just about to leave the station there would be a loud hissing sound accompanied by a lurch of the train and a conductor shouting “all aboard” while urging the crowd to get on the train or step back on the platform. As I watched the financial press earlier today, it seemed as if one could hear that same hissing sound as talking heads alternately instructed their viewers to step on or step back‐from the US Stock Market. It is true that bull markets climb a wall of worry as we have witnessed for many decades but many of those bull markets have come with frothy tops, particularly during the tech boom in the late 1990’s. Regardless of the financial media we are more than casual observers of US stocks and other financial markets around the globe as well. We do not attempt to time markets, nor do we rotate through sectors attempting to improve returns and thereby amplify risks. Rather, we practice the age‐old ritual of maintaining our discipline while rebalancing portfolios along the way. Therein lies the tricky part. Most investors do not want to sell bonds when stocks are declining nor do they want to sell stocks when the pundits are clamoring for investors to get in. But that is exactly what asset allocation is all about. When stocks go above targeted exposure it is indeed time to take a few chips off the table as a matter of discipline, not as a reaction to random predictions or an attempt to time markets or sectors. As one of my ranching clients once told me, occasionally you have to sell part of the herd for the good of the ranch. As we hit new highs in the Dow Jones Industrial Average and break through that magical level of 14,000 on an index of just 30 stocks, no doubt many will feel it is time to jump off the platform and get on the train before it leaves the proverbial station. Rarely in the history of financial markets or train travel for that matter, has it been a good idea to jump on board when the risks are highest. If this turns out to be one of those frothy tops it will not matter to us as we will continue to calmly disembark in an orderly fashion as our discipline dictates and rebalance our portfolios back to their intended targets. Not as a matter of whim or fancy, but rather as a matter of knowing in advance what works and it is wise to invest rather than gamble. As our clients avoid the commensurate emotions that come with feeling like the train is leaving the station we have the confidence of knowing that we will reach our destination safely. Rest assured, we are prepared to do what we have always done and believe that when it comes to investing, slow and steady wins the race.


Quarterly Market Review First Quarter 2013

This report features world capital market performance and a timeline of events for the last quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.

The report also illustrates the performance of globally diversified portfolios and features a topic of the quarter.

Overview: –

Market Summary

Timeline of Events

World Asset Classes

US Stocks

International Developed Stocks

Emerging Markets Stocks

Select Country Performance

Real Estate Investment Trusts (REITs)

Commodities

Fixed Income 

Global Diversification

Quarterly Topic: Betting against the House


Market Summary

First Quarter 2013 Index Returns

US Stock Market +11.07%

International  Developed  Stocks

Emerging  Markets Stocks

Global Real  Estate

US Bond  Market

Global Bond Market

+4.70%

‐1.62%

+7.66%

‐0.12%

+0.57%

STOCKS

BONDS

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), International Developed Stocks (MSCI World ex USA Index [net div.]), Emerging Markets (MSCI Emerging Markets Index [net div.]), Global Real Estate (S&P Global REIT Index), US Bond Market (Barclays US Aggregate Bond Index), and Global Bond Market (Barclays Global Aggregate Bond Index [Hedged to USD]). The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved. MSCI data copyright MSCI 2012, all rights reserved. Barclays data provided by Barclays Bank PLC. US long‐term bonds, bills, and inflation data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).


Timeline of Events: A Quarter in Review First Quarter 2013

Fiscal cliff – US House of  Representatives  adopts US Senate’s  budget bill.

US Federal Reserve  announces it will continue  purchasing $40 billion of  mortgage‐backed securities  and $45 billion of Treasury  securities each month.

World Bank cuts  2013 forecast for  global growth  from  3% to 2.4%.

12/31/2012

Data show US retail sales  increased 1.1% in February,  the largest rise since  FOMC minutes signal debate  September 2012. on scaling back US central  Data show US  bank’s bond buying program. GDP rose 0.4%  in Q4 2012,  Haruhiko Kuroda   revised from  named governor  prior estimate  of Bank of Japan.  of 0.1%  decrease. Euro zone’s  Dow Jones closes at  recession deepens  Cyprus reaches  record high of 14,253,  as exports from  €10B rescue  topping record set in  leading economies  deal with IMF,  October 2007. suffer and Q4 GDP  EU, and ECB. falls 0.6%. Italy’s election  ends in  deadlocked  parliament.

03/29/2013

The graph illustrates the MSCI All Country World Index (net div.) daily returns over the quarter. Source: MSCI data copyright MSCI 2012, all rights reserved. The events highlighted are not intended to explain market movements. The index is not available for direct investment. Past performance is not a guarantee of future results. 5


World Asset Classes

First Quarter 2013 Index Returns The US market led equity returns vs. developed ex US and emerging markets after strong performances in both January and February. The US  yield curve steepened and remained upwardly sloped.    

Barclays US Aggregate Bond Index   MSCI Emerging Markets Index (net div.) MSCI Emerging Markets Value Index (net div.) 

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: US Large Cap (S&P 500 Index), US Small Cap (Russell 2000 Index), US Value (Russell 1000 Value Index), US Real Estate (Dow Jones US Select REIT Index), Global Real Estate (S&P Global ex US REIT Index), International Developed Large, Small, and Value (MSCI World ex USA, ex USA Small, and ex USA Value Indexes [net div.]), Emerging Markets Large, Small, and Value (MSCI Emerging Markets, Emerging Markets Small, and Emerging Markets Value Indexes), US Bond Market (Barclays US Aggregate Bond Index), and Treasury (One‐Month US Treasury Bills). The S&P data are provided by Standard & Poor's Index Services Group. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved. MSCI data copyright MSCI 2012, all rights reserved. Dow Jones data (formerly Dow Jones Wilshire) provided by Dow Jones Indexes. Barclays data provided by Barclays Bank PLC. US long‐term bonds, bills, and inflation data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).


US Stocks

First Quarter 2013 Index Returns All major US asset classes posted positive results in the first quarter, with the broad market returning 11.07%. Asset class returns ranged from 9.54% for large growth stocks to 13.21% for small growth stocks. Across the size spectrum, small caps outperformed large caps. There was a positive value premium marketwide in the US, driven by the performance of large value and midcap value stocks; however, small cap value stocks underperformed small cap growth stocks. Period Returns (%)  Asset Class Marketwide Large Cap Large Cap Value Large Cap Growth Small Cap Small Cap Value Small Cap Growth

* Annualized 1 Year 14.56 13.96 18.77 10.09 16.30 18.09 14.52

3 Years** 12.97 12.67 12.74 13.06 13.45 12.12 14.75

5 Years** 10 Years** 6.32 9.15 5.81 8.53 4.85 9.17 7.30 8.62 8.24 11.52 7.29 11.29 9.04 11.61

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Marketwide (Russell 3000 Index), Large Cap (S&P 500 Index), Large Cap Value (Russell 1000 Value Index), Large Cap Growth (Russell 1000 Growth Index), Small Cap (Russell 2000 Index), Small Cap Value (Russell 2000 Value Index), and Small Cap Growth (Russell 2000 Growth Index). World Market Cap: Russell 3000 Index is used as the proxy for the US market. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved. The S&P data are provided by Standard & Poor's Index Services Group.


International Developed Stocks First Quarter 2013 Index Returns International developed equities maintained strong performances, with all major asset classes posting positive absolute numbers in US dollars for the quarter. Consistent with the fourth quarter, the US dollar appreciated relative to most major foreign developed currencies. Across the size and style spectra, small beat large and growth outperformed value.

Period Returns (%)  Asset Class Large Cap Small Cap Value Growth

* Annualized 1 Year 10.43 10.87 10.35 10.41

3 Years** 4.78 7.80 3.57 5.92

5 Years** 10 Years** ‐0.75 9.95 2.05 13.14 ‐1.16 10.28 ‐0.39 9.53

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Large Cap (MSCI World ex USA Index), Small Cap (MSCI World ex USA Small Cap Index), Value (MSCI World ex USA Value Index), and Growth (MSCI World ex USA Growth). All index returns are net of withholding tax on dividends. World Market Cap: Non-US developed market proxies are the respective developed country portions of the MSCI All Country World IMI ex USA Index. Proxies for the UK, Canada, and Australia are the relevant subsets of the developed market proxy. MSCI data copyright MSCI 2012, all rights reserved.


Emerging Markets Stocks First Quarter 2013 Index Returns

Many emerging markets posted negative returns for the quarter. There was a significant size premium, with small caps outperforming large caps by 5.8%. The value premium was negative across all size segments. The US dollar appreciated vs. most emerging markets currencies.

Period Returns (%)  Asset Class Large Cap Small Cap Value Growth

* Annualized 1 Year 1.96 9.20 ‐1.08 5.00

3 Years** 3.27 3.93 2.43 4.09

5 Years** 10 Years** 1.09 17.05 4.13 18.18 1.58 18.47 0.54 15.60

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: Large Cap (MSCI Emerging Markets Index), Small Cap (MSCI Emerging Markets Small Cap Index), Value (MSCI Emerging Markets Value Index), and Growth (MSCI Emerging Markets Growth Index). All index returns are net of withholding tax on dividends. World Market Cap: Emerging markets proxies are the respective emerging country portions of the MSCI All Country World IMI ex USA Index. MSCI data copyright MSCI 2012, all rights reserved.


Select Country Performance First Quarter 2013 Index Returns

The majority of developed markets posted positive returns. Japanese stocks gained 12.27%, as the local government continued to  implement its stimulus program. After receiving its first investment‐grade rating, the Philippines posted the highest performance among  emerging markets.

Country performance based on respective indices in the MSCI All Country World IMI Index (for developed markets), Russell 3000 Index (for US), and MSCI Emerging Markets IMI Index. All returns in USD and net of withholding tax on dividends. MSCI data copyright MSCI 2012, all rights reserved. Russell data copyright © Russell Investment Group 1995–2012, all rights reserved.


Real Estate Investment Trusts (REITs) First Quarter 2013 Index Returns International REITs outperformed US REITs by 38 basis points in the beginning of 2013. International REITs continued to post positive returns for the sixth consecutive quarter, while US REITs had their second consecutive quarter of positive returns.

Period Returns (%)  Asset Class    US REITs    Global REITs (ex US)

* Annualized 1 Year 13.19 27.46

3 Years** 16.94 14.93

5 Years** 10 Years** 6.07 12.10 1.31 10.38

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Number of REIT stocks and total value based on the two indices. All index returns are net of withholding tax on dividends. Dow Jones US Select REIT Index data provided by Dow Jones ©. S&P Global ex US REIT Index data provided by Standard and Poor’s © 2012.


Commodities

First Quarter 2013 Index Returns

Commodities settled slightly lower during the first quarter, somewhat offsetting a strong comeback at the end of 2012. The energy complex advanced, with natural gas providing significant total return during the period. Precious metals finished lower, as investors’ sensitivity to economic and geopolitical risks eased. Soft commodities generally finished lower. One exception was cotton, as the market incorporated projections from the US Department of Agriculture that indicated a reduction in production capacity.

Past performance is not a guarantee of future results. Index is not available for direct investment. Index performance does not reflect the expenses  associated with the management of an actual portfolio. All index returns are net of withholding tax on dividends. Dow Jones‐UBS Commodity Index Total  Return data provided by Dow Jones ©.  


Fixed Income

First Quarter 2013 Index Returns Bond yields crept higher during the period, as fixed income sold off and equities pursued record levels.

3/31/12 3/31/13 12/30/12

Global monetary policy remained accommodative, as central banks sought to maintain high levels of liquidity. These actions were taken to spur economic growth and protect the global financial system. Yield‐seeking behavior has been rewarded over the past year, as lower credit‐quality investments have outper‐ formed.

Period Returns (%)  Asset Class 1 Year One‐Month US Treasury Bills (SBBI) 0.06 Bank of America Merrill Lynch Three‐Month Treasury  0.12 Bank of America Merrill Lynch One‐Year US Treasury N 0.31 Ci group World Government Bond 1−5 Years (hedged 1.83 US Long‐Term Government Bonds (SBBI) 5.99 Barclays Corporate High Yield 13.13 Barclays Municipal Bonds 5.25 Barclays US TIPS Index 5.68

* Annualized 3 Years** 5 Years**10 Years** 0.07 0.30 1.62 0.11 0.34 1.75 0.49 1.01 2.15 1.96 2.66 3.27 12.14 8.11 7.16 11.24 11.65 10.12 6.23 6.10 5.01 8.57 5.89 6.32

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Yield curve data from Federal Reserve. State and local bonds are from the Bond Buyer Index, general obligation, 20 years to maturity, mixed quality. AAA‐AA Corporates represent the Bank of America Merrill Lynch US Corporates, AA‐AAA rated. A‐BBB Corporates represent the Bank of America Merrill Lynch US Corporates, BBB‐A rated. Barclays data provided by Barclays Bank PLC. US long‐term bonds, bills, inflation, and fixed income factor data © Stocks, Bonds, Bills, and Inflation (SBBI) Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield). Citigroup bond indices copyright 2012 by Citigroup. The Merrill Lynch Indices are used with permission; copyright 2012 Merrill Lynch, Pierce, Fenner & Smith Incorporated; all rights reserved.


Global Diversification

First Quarter 2013 Index Returns

These portfolios illustrate the performance of different global stock/bond mixes and highlight the benefits of diversification. Mixes with larger allocations to stocks are considered riskier but also have higher expected returns over time.

Stock/Bond Mix 100% Stocks Period Returns (%) 

* Annualized

Asset Class 1 Year 3 Years** 5 Years** 0 Years** 100% Stocks 11.19 8.35 2.63 9.92 75/25 8.46 6.50 2.50 8.09 50/50 5.69 4.50 2.05 6.08 25/75 2.89 2.35 1.32 3.92 100% Treasury Bi 0.06 0.07 0.30 1.62

75/25 50/50    25/75 100% Treasury Bills

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect expenses associated with the management an actual portfolio. Asset allocations and the hypothetical index portfolio returns are for illustrative purposes only and do not represent actual performance. Global Stocks represented by MSCI All Country World Index (gross div.) and Treasury Bills represented by US One‐Month14 Treasury Bills. Globally diversified portfolios rebalanced monthly. Data copyright MSCI 2012, all rights reserved. Treasury bills © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).


Betting Against the House First Quarter 2013

It’s New Year’s Day 2012. In addition to overdosing on televised college football, you’re spending part of the holiday working on the family finances. Armed with a laptop and various online financial tools, you’re on the hunt for appealing stock market opportunities. To prune the list of candidates to a manageable size, you decide to focus on firms that are leaders in their respective industries and exhibit above‐average scores on various measures of financial strength. As you work your way through the alphabet, you come to the “P” stocks, and another candidate appears. It’s a prominent player in a major industry (good), but operates in a notoriously cyclical industry (not so good), is currently losing money (definitely not good), pays no dividend, and has a junk‐bond credit rating of BB‐ minus. Next! You push the “delete” key and move on. Congratulations. You just passed up the best‐performing stock in the entire S&P 500 Index for 2012. Shares of PulteGroup, a Michigan‐based homebuilder with a 60‐year history, jumped 187.8% last year amid strong performance for the entire industry. For

the year ending December 31, 2012, all 13 homebuilding firms listed on the New York Stock Exchange outperformed the S&P 500 Index by a wide margin, with total returns ranging from 34.1% for NVR to 382.8% for Hovnanian Enterprises. The Standard & Poor’s SuperComposite Homebuilding Sub‐Index rose 84.1% in 2012 compared to 13.4% for the S&P 500 Index. The point? For those seeking to outperform the market through stock selection, underweighting the market’s biggest winners can be just as painful as overweighting the biggest losers. Investors are often caught flat‐footed by stocks that do much better or much worse than the broad market, and the problem is not limited to individuals. Not one of the 10 seasoned professionals participating in Barron’s annual Roundtable stock‐picking panel in early January 2012 mentioned homebuilding stocks or any housing‐related firms. The recent surge in housing shares also serves as a reminder that stock prices are forward‐looking and tend to rise or fall well in advance of clear changes in company fundamentals.

Investors who insist on waiting for evidence of healthy profits before investing are often frustrated to find that a firm’s stock price has appreciated dramatically by the time the firm begins to report cheery financial results. Shares of Hovnanian Enterprises, for example, rose 580% between October 7, 2011, and December 31, 2012, even though the firm continued to report losses. Similarly, it is not unusual for a firm’s stock price to decline long before signs of trouble become obvious. Many observers in recent years predicted that a recovery in the housing industry would be agonizingly slow, and they were right. Many investors in recent years have avoided housing stocks as a consequence, and they’ve been wrong: Housing stocks have outperformed the broad US stock market by a healthy margin from the market low in March 2009 to the present day. BOTTOM LINE: Markets have 101 ways to remind us of Nobel laureate Merton Miller’s observation—diversification is the investor’s best friend.

Diversification does not eliminate the risk of market loss. Past performance is no guarantee of future results . Adapted from “Betting against the House” by Weston Wellington, Down to the Wire column on Dimensional’s website, February 2013. This information is provided for educational purposes only and should not be considered investment advice or a solicitation to buy or sell securities. Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.


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Your WealthPath


WealthPath Process X Discovery Meeting

Complete discovery process

[

Regular Progress Meetings

Y

Progress & implementation of your Wealthpath

Investment Planning Meeting

Presentation of investment plan

Z Initial Follow-up Meeting Risk Management Review

.


Your WealthPath

Stuart and Susan Preston

Prepared by: Brian Murphy President

April 11, 2013


Table Of Contents Personal Information and Summary of Financial Goals Current Financial Goals Graph Resources Summary Net Worth Summary - All Resources Net Worth Detail - All Resources What If Worksheet Life Expectancy Table and Graph Insurance Inventory Tax and Inflation Assumptions

1 2 3-6 7 8 9 - 14 15 16 17


Personal Information and Summary of Financial Goals Stuart and Susan Preston Needs 10

Retirement - Living Expense Stuart Susan Both Retired (2014-2045) Susan Alone Retired (2046-2049)

61 / 2014 60 / 2014 $360,000 $288,000 Base Inflation Rate (3.10%)

Wants 7

College - Steven 4 years starting in 2012

7

$18,000 Base Inflation Rate plus 2.90% (6.00%)

College - Sean 4 years starting in 2013

$18,000 Base Inflation Rate plus 2.90% (6.00%)

Personal Information Stuart Male - born 12/25/1953, age 59 Employed - $350,000 Susan Female - born 01/25/1954, age 59 Homemaker Married, US Citizens living in AZ • This section lists the Personal and Financial Goal information you provided, which will be used to create your Report. It is important that it is accurate and complete.

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 1 of 17


Current Financial Goals Graph This graph shows the annual costs for your Financial Goals, as you have specified. Because these costs will be used to create your Plan, it is important that they are accurate and complete. All amounts are in after-tax, future dollars.

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 2 of 17


Resources Summary Investment Assets Description

Owner

Preston PSP

Stuart

Current Value $465,566

Account Total Preston, Sean

Custodial

Stuart

$20,475

College - Steven

$2,971,765

Fund All Goals

$154,099

Fund All Goals

$488,640

Fund All Goals

$97,140 $119,581 $348,870 $490,883 $320,478 $139,956 $129,326 $1,069,152 $24,491

PROSHARES ULTRASHORT LEHMAN 20YR TREAS

$21,959

PROSHARES ULTRASHORT S&P 500

$24,443

SPDR GOLD TR GOLD SHS ETF

$45,315

Preston, Stuart and Susan

College - Steven

$140,171

No Name Passed

Account Total

$20,475

$20,475

DFA 1 YEAR FIXED INCOME PORTFOLIO DFA COMMODITY STRATEGY PORTFOLIO DFA EMERGING MARKETS CORE EQUITY FUND DFA FIVE YEAR GLOBAL FIXED INCOME PORTFOLIO DFA INTERNATIONAL CORE EQUITY PORTFOLIO DFA INVESTMENT GRADE PORTFOLIO I DFA REAL ESTATE SECURITIES PORTFOLIO DFA SHORT TERM EXTENDED QUALITY PORTFOLIO DFA U.S. CORE EQUITY 2 PORTFOLIO

Preston, Stuart 401(k)

Fund All Goals

$20,475 Custodial

No Name Passed Preston, Stuart

Assign to Goal

$465,566

No Name Passed Preston, Steven

Additions

Stuart $154,099 Joint Survivorship

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 3 of 17


Resources Summary Investment Assets Description

Owner

DFA 1 YEAR FIXED INCOME PORTFOLIO DFA COMMODITY STRATEGY PORTFOLIO DFA EMERGING MARKETS CORE EQUITY FUND DFA FIVE YEAR GLOBAL FIXED INCOME PORTFOLIO DFA INTERNATIONAL CORE EQUITY PORTFOLIO DFA INVESTMENT GRADE PORTFOLIO I DFA REAL ESTATE SECURITIES PORTFOLIO DFA SHORT TERM EXTENDED QUALITY PORTFOLIO DFA U.S. CORE EQUITY 2 PORTFOLIO DFA U.S. SMALL CAP VALUE PORTFOLIO

$9,872 $110,124 $14,722 $31,120 $3,919 $29,507 $42,701 $15,963 $60,720 $4,572

PROSHARES ULTRASHORT S&P 500

$21,255 Stuart

Account Total

Fund All Goals

$91,345

Fund All Goals

$128,740

Fund All Goals

$20,619

Fund All Goals

$90,227 $1,118 Susan

Account Total DFA GLOBAL EQUITY PORTFOLIO INSTITUTIONAL

$35,000

$337,104

No Name Passed

Preston, Susan IRA

$337,104

Stuart

DFA GLOBAL EQUITY PORTFOLIO INSTITUTIONAL Preston, Susan 401(k)

Assign to Goal

$88,857

No Name Passed

Preston, Stuart IRA

Additions

$55,308

ISHARES GOLD TRUST COM

Preston, Stuart INDIV

Current Value

$128,740 Susan $20,371

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 4 of 17


Resources Summary Investment Assets Description

Owner

No Name Passed

Current Value

Additions

Assign to Goal

Future Value

Assign to Goal

$248 Total Investment Assets :

$4,698,828

Other Assets Description

Owner

Current Value

Primary Home

Joint Community Property

$800,000

$2,631,349

Leave To Estate

Realestate 3

Stuart

$200,000

$638,057

Leave To Estate

Realestate 1

Joint Community Property

$200,000

$400,000

Fund All Goals

Realestate 2

Stuart

$400,000

$632,324

Fund All Goals

Insurance

Stuart

$110,644

Not Used In Plan

Universal Life Insurance

Stuart

$112,927

Not Used In Plan

Total of Other Assets :

$1,823,571

Insurance Policies Description

Owner

Insured

Cash Value Life Insurance Policies Summary (included in Assets) Insurance Stuart Stuart Universal Life Universal Life Insurance Universal Life

Stuart

Insurance Policies Summary (not included in Assets) Term Life Stuart Term Life

Beneficiary

Annual Premium

Unspecified - 100%

Stuart

Unspecified - 100%

Stuart

Unspecified - 100%

$3,853

Cash Value

Death Benefit Premium Paid

$110,644

$600,644 Until Insured Dies

$112,927

$363,000

$1,000,000

Group Disability Group

Stuart

$1,806

Disability Income Personal

Stuart

$2,944

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 5 of 17


Resources Summary Insurance Policies Description

Owner

Insured

Beneficiary

Annual Premium

Cash Value

Death Benefit Premium Paid

Total Death Benefit of All Policies :

$1,963,644

If the assets include a Variable Life Investment Asset, the value shown for this policy in the Premium column reflects only the assumed annual increase in the cash value of the insurance policy and not the total premium. Social Security Description

Owner

Value

Social Security

Stuart

$29,874 starting At Stuart's Normal Full Retirement Age

File Status

Assign to Goal Fund All Goals

Social Security

Susan

$14,937 starting At Susan's Normal Full Retirement Age

Fund All Goals

Description

Owner

Value

Assign to Goal

Real Estate Investment

Stuart

$10,000 from 2013 to 2027 No

Retirement Income Increase Rate

Fund All Goals

Liabilities Type

Description

Owner

1st Mortgage

Mortgage and LOC

Joint Total Outstanding Balance :

Outstanding Balance Interest Rate Monthly Payment $300,000 $300,000

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 6 of 17


Net Worth Summary - All Resources This is your Net Worth Summary as of 04/11/2013. Your Net Worth is the difference between what you own (your Assets) and what you owe (your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities.

Description

Total

Investment Assets Employer Retirement Plans

$3,437,331

Individual Retirement Accounts

$111,964

Annuities & Tax-Deferred Products

$282,839

Taxable and/or Tax-Free Accounts

$825,744

Total Investment Assets:

$4,657,878

Other Assets Personal Asset

$800,000

Business and Property

$800,000

Cash Value Life

$223,571

Total Other Assets:

$1,823,571

Liabilities Investment Assets Other Assets

$4,657,878 +

Total Assets Total Liabilities Net Worth

$1,823,571 $6,481,449

-

Personal Real Estate Loan:

$300,000

Total Liabilities:

$300,000

Net Worth:

$6,181,449

$300,000 $6,181,449

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 7 of 17


Net Worth Detail - All Resources This is your Net Worth Detail as of 04/11/2013. Your Net Worth is the difference between what you own (your Assets) and what you owe (your Liabilities). To get an accurate Net Worth statement, make certain you have entered all of your Assets and Liabilities.

Description

Stuart

Susan

Joint

Total

Investment Assets Preston PSP Preston, Stuart Preston, Stuart IRA

$465,566

$465,566

$2,971,765

$2,971,765

$91,345

$91,345

Preston, Susan IRA Preston, Stuart 401(k)

$20,619 $154,099

Preston, Susan 401(k) Preston, Stuart INDIV

$154,099 $128,740

$128,740

$337,104

$337,104

Preston, Stuart and Susan Total Investment Assets:

$20,619

$4,019,879

$149,359

$488,640

$488,640

$488,640

$4,657,878

$800,000

$800,000

Other Assets Primary Home Realestate 3

$200,000

$200,000

Realestate 1

$200,000

$200,000

Realestate 2

$400,000

$400,000

Insurance

$110,644

$110,644

Universal Life Insurance

$112,927

$112,927

Total Other Assets:

$823,571

$0

$1,000,000

$1,823,571

$300,000

$300,000

$300,000

$300,000

Liabilities Mortgage and LOC Total Liabilities:

$0

$0

Net Worth:

$6,181,449

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 8 of 17


What If Worksheet This Worksheet allows you to analyze and compare the results of one or more scenarios that you created by varying the Plan assumptions. Estimated % of Goal Funded Goals

Ideal $360,000

Recommended $200,000

Acceptable $180,000

Average Return

Bad Timing

Average Return

Bad Timing

Average Return

Bad Timing

66%

50%

100%

100%

100%

100%

33%

32%

100%

100%

100%

100%

Current dollars (in thousands) :

$1,134

$1,134

$10,458

$8,101

$11,942

$9,977

Future dollars (in thousands) :

$3,508

$3,508

$32,361

$25,069

$36,952

$30,871

Needs 10 Retirement Wants 7

College - Steven

7

College - Sean

Safety Margin (Value at End of Plan)

Monte Carlo Results

Likelihood of Funding All Goals

Your Confidence Zone: 75% - 90%

Probability of Success: < 40%

Probability of Success: 91%

Probability of Success: 95%

Below Confidence Zone

Above Confidence Zone

Above Confidence Zone

Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 9 of 17


What If Worksheet Key Assumptions

Ideal $360,000

Recommended $200,000

Acceptable $180,000

Stress Tests Method(s)

Bad Timing Program Estimate Years of bad returns: 2014: -14.64% 2015: -2.84%

Bad Timing Program Estimate Years of bad returns: 2014: -14.64% 2015: -2.84%

Bad Timing Program Estimate Years of bad returns: 2014: -14.64% 2015: -2.84%

Funding Order Assets - Ignore Earmarks

No

No

No

Retirement Income - Ignore Earmarks

No

No

No

Custom PFP 60

Custom PFP 60

Custom PFP 60

Total Return :

9.96%

9.96%

9.96%

Standard Deviation :

11.80%

11.80%

11.80%

Total Return Adjustment :

-1.00%

-1.00%

-1.00%

Adjusted Real Return :

5.86%

5.86%

5.86%

Custom PFP 60

Custom PFP 60

Custom PFP 60

Hypothetical Average Rate of Return Before Retirement :

After Retirement : Total Return :

9.96%

9.96%

9.96%

Standard Deviation :

11.80%

11.80%

11.80%

Total Return Adjustment :

-1.00%

-1.00%

-1.00%

Adjusted Real Return :

5.86%

5.86%

5.86%

3.10%

3.10%

3.10%

No

No

No

0.00%

0.00%

0.00%

No

No

No

0.00%

0.00%

0.00%

Base inflation rate : Tax-Free Options Before Retirement Reallocate a portion of bonds to tax-free: Percent of bond allocation to treat as tax-free: After Retirement Reallocate a portion of bonds to tax-free: Percent of bond allocation to treat as tax-free:

Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 10 of 17


What If Worksheet Key Assumptions

Ideal $360,000

Recommended $200,000

Acceptable $180,000

Goals Living Expense Retirement Age Stuart

61

61

61

Stuart

92

92

92

Susan

95

95

95

$360,000

$200,000

$180,000

Susan Alone Retired

$288,000

$160,000

$144,000

Stuart Alone Retired

$288,000

$160,000

$144,000

$288,000

$160,000

$144,000

2012

2012

2012

4

4

4

$18,000

$18,000

$18,000

2013

2013

2013

4

4

4

$18,000

$18,000

$18,000

Planning Age

Both Retired Both Retired One Alone - Retired

One Alone - Employed Stuart Alone Employed College - Steven Year : Years of Education : Annual Cost : College - Sean Year : Years of Education : Annual Cost :

Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 11 of 17


What If Worksheet Key Assumptions

Ideal $360,000

Recommended $200,000

Acceptable $180,000

Retirement Income Real Estate Investment Annual Income :

$10,000

$10,000

$10,000

2013

2013

2013

Select Your Own Year

Select Your Own Year

Select Your Own Year

2027

2027

2027

Customize Benefits

Customize Benefits

Customize Benefits

Normal

Normal

Normal

Age to begin retirement benefits:

At Stuart's Full Retirement Age 66 yrs 0 mos

At Stuart's Full Retirement Age 66 yrs 0 mos

At Stuart's Full Retirement Age 66 yrs 0 mos

Select benefit to use:

Use the Program Estimate

Use the Program Estimate

Use the Program Estimate

Social Security Amount:

$29,874

$29,874

$29,874

Widower annual benefit:

$0

$0

$0

Reduce benefits by:

0%

0%

0%

Normal

Normal

Normal

Age to begin retirement benefits:

At Susan's Full Retirement Age 66 yrs 0 mos

At Susan's Full Retirement Age 66 yrs 0 mos

At Susan's Full Retirement Age 66 yrs 0 mos

Select benefit to use:

Use the Program Estimate

Use the Program Estimate

Use the Program Estimate

Social Security Amount:

$14,937

$14,937

$14,937

Widower annual benefit:

$0

$0

$0

Reduce benefits by:

0%

0%

0%

Start Year : Select when income will end : Year to end retirement income : Social Security Select Social Security Strategy Stuart Select Filing Method: Select when benefits will begin:

Susan Select Filing Method: Select when benefits will begin:

Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 12 of 17


What If Worksheet Key Assumptions

Ideal $360,000

Recommended $200,000

Acceptable $180,000

Asset Additions Preston, Stuart INDIV After-Tax Addition:

$35,000

$35,000

$35,000

Tax-Free Addition:

$0

$0

$0

2013

2013

2013

Stuart's Qualified

$0

$0

$0

Susan's Qualified

$0

$0

$0

Stuart's Roth

$0

$0

$0

Susan's Roth

$0

$0

$0

Stuart's Tax-Deferred

$0

$0

$0

Susan's Tax-Deferred

$0

$0

$0

Taxable

$0

$0

$0

Year additions begin: Stuart - Fund All Goals Extra Savings by Tax Category

Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 13 of 17


What If Worksheet Key Assumptions

Ideal $360,000

Recommended $200,000

Acceptable $180,000

Other Assets Primary Home Include in Plan :

Yes

Yes

Yes

When received :

2049

2049

2049

$2,631,349

$2,631,349

$2,631,349

Yes

Yes

Yes

Amount of cash received : Realestate 3 Include in Plan : When received : Amount of cash received :

2049

2049

2049

$638,057

$638,057

$638,057

Yes

Yes

Yes

Realestate 1 Include in Plan : When received : Amount of cash received :

2027

2027

2027

$400,000

$400,000

$400,000

Yes

Yes

Yes

Realestate 2 Include in Plan : When received :

2025

2025

2025

$632,324

$632,324

$632,324

Include Tax Penalties :

Yes

Yes

Yes

Change Tax Rate?

No

No

No

0.00%

0.00%

0.00%

Amount of cash received : Tax Options

Year To Change : Change Tax Rate by this % (+ or -) :

Indicates different data between the Scenario in the first column and the Scenario in any other column. See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 14 of 17


Life Expectancy Table and Graph How long might you live? Stuart lives to age Chance you will live to age shown

Susan lives to age

Either lives to age

Non-Smoker

Smoker

Non-Smoker

Smoker

Non-Smoker

Smoker

50%

85

76

88

80

92

83

40%

87

79

90

83

93

85

30%

90

81

93

85

95

87

20%

93

84

95

87

98

89

10%

97

87

99

90

101

91

All calculations based on Annuity 2000 Mortality Table.

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 15 of 17


Insurance Inventory Life Description

Owner

Insured

Death Benefit

Cash Value

Annual Premium

Beneficiary

Policy Start Date

Universal Life Insurance

Stuart

Stuart

$363,000

$112,927

Unspecified - 100%

Insurance

Stuart

Stuart

$600,644

$110,644

$3,853 Unspecified - 100%

Term Life

Stuart

Stuart

$1,000,000

Unspecified - 100%

06/1999

If the assets include a Variable Life Investment Asset, the value shown for this policy in the Annual Premium column reflects only the assumed annual increase in the cash value of the insurance policy and not the total premium. Disability Description

Insured

Annual Premium

Tax Status

Monthly Benefit

Elimination Period

Benefit Period Inflation Option

Policy Start Date

Group Disability

Stuart

$1,806 pre-tax

$11,254

1 Years

Until Age 65

No Inflation

11/1994

Disability Income

Stuart

$2,944 pre-tax

$7,600

3 Years

Until Age 65

No Inflation

05/1994

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 16 of 17


Tax and Inflation Assumptions Base Inflation Rate

Tax Penalty

Inflation rate :

3.10%

Include penalties in Plan? :

Social Security Inflation rate :

3.10%

Tax Free Earnings - Options

Tax Assumption Inflation rate :

3.10%

Use Tax-Free returns by Asset Class, Marginal Tax Rate to use during Retirement is 40.00%

Marginal Tax Rates Before Retirement

Tax Rates :

Yes

Federal

State

Local

33.00%

4.54%

0.00%

Untaxed Gain on Taxable Earnings - Before Retirement What portion of your Annual Taxable Investment Earnings will not be taxed until withdrawn?

0.00%

Long Term Capital Gains (LTCG) - Before Retirement What portion of your Taxable Investment Earnings will be taxed at the LTCG rate?

20.00%

Long Term Capital Gains rate :

Use Program estimate

Tax Rates During Retirement Let the Program calculate taxes each year Local rate :

0.00%

Deduction estimate :

Use standard deductions

Untaxed Gain on Taxable Earnings - During Retirement What portion of your Annual Taxable Investment Earnings will not be taxed until withdrawn?

0.00%

Long Term Capital Gains (LTCG) - During Retirement What portion of your Taxable Investment Earnings will be taxed at the LTCG rate?

20.00%

Long Term Capital Gains rate :

Use Program estimate

Taxation of Social Security What portion of Social Security will be taxed?

85.00%

See Important Disclosure Information section in this Report for explanations of assumptions, limitations, methodologies, and a glossary. Prepared for : Stuart and Susan Preston 04/11/2013

Company Name : Pathways Financial Partners

Prepared by: Brian Murphy Page 17 of 17


Notes


Â&#x192;

Quarterly Portfolio Review


Quarterly Statement Household:

Preston, Stuart and Susan

Period:

1/1/2013 to 3/31/2013

Activity Summary

Allocation Summary Period

YTD

Since Inception

(1/1/2013 to 3/31/2013)

(1/1/2013 to 3/31/2013)

(6/8/2005 to 3/31/2013)

$3,510,793.70

$3,510,793.70

$0.00

Contributions

$0.00

$0.00

$1,819,959.55

Distributions

$0.00

$0.00

($200,112.01)

Transfer In/Out

$0.00

$0.00

$782,941.24

Miscellaneous Charges

$0.00

$0.00

($2,022.73)

Bond Accrual

$0.00

$0.00

$0.00

$105,460.82

$105,460.82

$1,215,488.47

$3,616,254.52

$3,616,254.52

$3,616,254.52

Beginning Market Value (Including Bond Accrual)

Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)

Index Comparison

Risk Category Equity Fixed Income Unassigned Money Market

59.8 % 27.5 % 9.5 % 3.2 %

Returns are Net of Fees * The first 12 month returns are not annualized

for the period 1/1/2013 to 3/31/2013 (Including bond accrual)

Period

3/31/2013

QTD

YTD

1 Year

3 Year

5 Year

10 Year

Inception (6/8/2005)

Preston, Stuart and Susan

3.00 %

3.00 %

3.00 %

11.79 %

6.20 %

4.95 %

N/A

5.68 %

-2.09 %

-2.09 %

-2.09 %

1.26 %

4.52 %

3.66 %

N/A

4.81 %

5.15 %

5.15 %

5.15 %

11.27 %

5.00 %

-0.88 %

N/A

4.41 %

MSCI Emerging Markets

-1.84 %

-1.84 %

-1.84 %

1.73 %

3.20 %

1.04 %

N/A

10.78 %

S&P 500

10.61 %

10.61 %

10.61 %

13.96 %

12.67 %

5.81 %

N/A

5.76 %

Barclays Capital Global Agg Bond MSCI EAFE

Preston, Stuart and Susan


Quarterly Statement

Page 3 of 14

Account: Susan Preston (Individual Retirement Account), TD Ameritrade Activity Summary

Allocation Summary Period

YTD

Since Inception

(1/1/2013 to 3/31/2013)

(1/1/2013 to 3/31/2013)

(11/28/2008 to 3/31/2013)

$18,711.40

$18,711.40

$0.00

Contributions

$0.00

$0.00

$542.53

Distributions

$0.00

$0.00

$0.00

Transfer In/Out

$0.00

$0.00

$11,293.78

Miscellaneous Charges

$0.00

$0.00

($114.03)

Bond Accrual

$0.00

$0.00

$0.00

$1,559.65

$1,559.65

$8,548.77

$20,271.05

$20,271.05

$20,271.05

Beginning Market Value (Including Bond Accrual)

Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)

Performance Summary

Risk Category Equity Money Market

97.7 % 2.3 %

Returns are Net of Fees * The first 12 month returns are not annualized

for the period 1/1/2013 to 3/31/2013 (Including bond accrual)

Period

3/31/2013

QTD

YTD

1 Year

3 Year

5 Year

10 Year

Inception (11/28/2008)

TD Ameritrade

8.34 %

8.34 %

8.34 %

11.09 %

8.01 %

N/A

N/A

13.58 %

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Susan Preston (IRA) Equity Global Equity DFA I Global Equity

888888888

1,288.97

$15.37

$10,774.00

$19,811.45

97.73 %

Global Equity Total:

$10,774.00

$19,811.45

97.73 %

Equity Total:

$10,774.00

$19,811.45

97.73 %

Preston, Stuart and Susan


Quarterly Statement

Page 4 of 14

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC

888888888

459.60

$1.00

$459.60

$459.60

2.27 %

Money Market Total:

$459.60

$459.60

2.27 %

Money Market Total:

$459.60

$459.60

2.27 %

Susan Preston (IRA) Total:

$11,233.60

$20,271.05

100.00 %

Account Total:

$11,233.60

$20,271.05

100.00 %

* Including bond accrual

Preston, Stuart and Susan


Quarterly Statement

Page 5 of 14

Account: Stuart Preston (Individual Retirement Account), TD Ameritrade Activity Summary

Allocation Summary Period

YTD

Since Inception

(1/1/2013 to 3/31/2013)

(1/1/2013 to 3/31/2013)

(12/11/2008 to 3/31/2013)

$82,661.30

$82,661.30

$0.00

Contributions

$0.00

$0.00

$4,361.72

Distributions

$0.00

$0.00

$0.00

Transfer In/Out

$0.00

$0.00

$44,401.00

Miscellaneous Charges

$0.00

$0.00

($88.23)

Bond Accrual

$0.00

$0.00

$0.00

$6,745.78

$6,745.78

$40,732.59

$89,407.08

$89,407.08

$89,407.08

Beginning Market Value (Including Bond Accrual)

Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)

Performance Summary

Risk Category Equity Money Market

95.8 % 4.2 %

Returns are Net of Fees * The first 12 month returns are not annualized

for the period 1/1/2013 to 3/31/2013 (Including bond accrual)

Period

3/31/2013

QTD

YTD

1 Year

3 Year

5 Year

10 Year

Inception (12/11/2008)

TD Ameritrade

8.16 %

8.16 %

8.16 %

10.85 %

8.08 %

N/A

N/A

15.20 %

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Stuart Preston (IRA) Equity Global Equity DFA I Global Equity

999999999

5,575.02

$15.37

$46,826.00

$85,688.12

95.84 %

Global Equity Total:

$46,826.00

$85,688.12

95.84 %

Equity Total:

$46,826.00

$85,688.12

95.84 %

Preston, Stuart and Susan


Quarterly Statement

Page 6 of 14

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC

999999999

3,718.96

$1.00

$3,718.96

$3,718.96

4.16 %

Money Market Total:

$3,718.96

$3,718.96

4.16 %

Money Market Total:

$3,718.96

$3,718.96

4.16 %

Stuart Preston (IRA) Total:

$50,544.96

$89,407.08

100.00 %

Account Total:

$50,544.96

$89,407.08

100.00 %

* Including bond accrual

Preston, Stuart and Susan


Quarterly Statement

Page 7 of 14

Account: Stuart and Susan Preston (Joint), TD Ameritrade Activity Summary

Allocation Summary Period

YTD

Since Inception

(1/1/2013 to 3/31/2013)

(1/1/2013 to 3/31/2013)

(12/2/2008 to 3/31/2013)

$570,055.91

$570,055.91

$0.00

Contributions

$0.00

$0.00

($199,944.93)

Distributions

$0.00

$0.00

($200,088.01)

Transfer In/Out

$0.00

$0.00

$549,332.46

Miscellaneous Charges

$0.00

$0.00

($904.93)

Bond Accrual

$0.00

$0.00

$0.00

Market Value Increase/Decrease

($18,614.87)

($18,614.87)

$403,046.45

Ending Market Value (Including Bond Accrual)

$551,441.04

$551,441.04

$551,441.04

Beginning Market Value (Including Bond Accrual)

Performance Summary

Risk Category Fixed Income Equity Unassigned Money Market

41.0 % 27.5 % 27.2 % 4.2 %

Returns are Net of Fees * The first 12 month returns are not annualized

for the period 1/1/2013 to 3/31/2013 (Including bond accrual)

Period

3/31/2013

QTD

YTD

1 Year

3 Year

5 Year

10 Year

Inception (12/2/2008)

TD Ameritrade

-3.27 %

-3.27 %

-3.27 %

12.59 %

4.93 %

N/A

N/A

20.59 %

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Stuart and Susan Preston (JNT)

Specialty Proshares Ultra Short 500

987987987

2,000.00

$43.94

$71,442.47

$87,880.00

15.94 %

$71,442.47

$87,880.00

15.94 %

$71,369.59

$62,080.00

11.26 %

Commodity Total:

$71,369.59

$62,080.00

11.26 %

Total:

$142,812.06

$149,960.00

27.19 %

Specialty Total:

Commodity iShares Gold Trust

987987987

4,000.00

$15.52

Preston, Stuart and Susan


Quarterly Statement

Page 8 of 14

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Fixed Income Global Fixed Inc DFA 5-Year Global Fixed Income

987987987

9,823.77

$11.19

Global Fixed Inc Total:

$110,639.61

$109,927.94

19.93 %

$110,639.61

$109,927.94

19.93 %

Fixed Income DFA Short-Term Extended Quality

987987987

2,702.13

$10.93

$29,369.14

$29,534.29

5.36 %

DFA Inflation Protected

987987987

2,465.58

$12.77

$27,453.81

$31,485.46

5.71 %

$56,822.95

$61,019.75

11.07 %

$55,331.81

$55,307.81

10.03 %

Short Term Bond Total:

$55,331.81

$55,307.81

10.03 %

Fixed Income Total:

$222,794.37

$226,255.50

41.03 %

$105,048.00

$89,550.14

16.24 %

$105,048.00

$89,550.14

16.24 %

$31,024.00

$41,424.51

7.51 %

$31,024.00

$41,424.51

7.51 %

$13,024.00

$14,117.18

2.56 %

$13,024.00

$14,117.18

2.56 %

$3,024.00

$3,770.66

0.68 %

$3,024.00

$3,770.66

0.68 %

Fixed Income Total:

Short Term Bond DFA 1-Year Fixed Income

987987987

5,354.10

$10.33

Equity Commodity DFA Commodity Strategy

987987987

9,840.68

$9.10 Commodity Total:

All Cap Equity DFA US Core II

987987987

3,039.22

$13.63

All Cap Equity Total:

Intl Large Blend DFA International Core

987987987

1,269.53

$11.12

Intl Large Blend Total:

Real Estate DFA Real Estate

987987987

133.33

$28.28 Real Estate Total:

Preston, Stuart and Susan


Quarterly Statement

Page 9 of 14

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Emerging Mkt DFA Emerging Markets Core

987987987

149.93

$20.21

$3,024.00

$3,029.98

0.55 %

Emerging Mkt Total:

$3,024.00

$3,029.98

0.55 %

Equity Total:

$155,144.00

$151,892.47

27.54 %

$23,333.07

$23,333.07

4.23 %

Money Market Total:

$23,333.07

$23,333.07

4.23 %

Money Market Total:

$23,333.07

$23,333.07

4.23 %

Stuart and Susan Preston (JNT) Total:

$544,083.50

$551,441.04

100.00 %

Account Total:

$544,083.50

$551,441.04

100.00 %

Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC

987987987

23,333.07

$1.00

* Including bond accrual

Preston, Stuart and Susan


Quarterly Statement

Page 10 of 14

Account: Stuart Preston PSP 5/1/2005 (Qualified Plan), TD Ameritrade Activity Summary

Allocation Summary Period

YTD

Since Inception

(1/1/2013 to 3/31/2013)

(1/1/2013 to 3/31/2013)

(6/8/2005 to 3/31/2013)

$2,839,365.09

$2,839,365.09

$0.00

Contributions

$0.00

$0.00

$2,015,000.23

Distributions

$0.00

$0.00

($24.00)

Transfer In/Out

$0.00

$0.00

$177,914.00

Miscellaneous Charges

$0.00

$0.00

($915.54)

Bond Accrual

$0.00

$0.00

$0.00

$115,770.26

$115,770.26

$763,160.66

$2,955,135.35

$2,955,135.35

$2,955,135.35

Beginning Market Value (Including Bond Accrual)

Market Value Increase/Decrease Ending Market Value (Including Bond Accrual)

Performance Summary

Risk Category Equity Fixed Income Unassigned Money Market

64.5 % 26.0 % 6.5 % 3.0 %

Returns are Net of Fees * The first 12 month returns are not annualized

for the period 1/1/2013 to 3/31/2013 (Including bond accrual)

Period

3/31/2013

QTD

YTD

1 Year

3 Year

5 Year

10 Year

Inception (6/8/2005)

TD Ameritrade

4.08 %

4.08 %

4.08 %

11.67 %

6.58 %

3.76 %

N/A

4.91 %

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Stuart Preston PSP 5/1/2005 (QUAL)

Specialty Proshares Ultrashort 20+ Yr Treasury

654654654

1,400.00

$65.71

$52,783.84

$91,994.00

3.11 %

Proshares Ultra Short 500

654654654

2,300.00

$43.94

$81,567.76

$101,062.00

3.42 %

Specialty Total:

$134,351.60

$193,056.00

6.53 %

Total:

$134,351.60

$193,056.00

6.53 %

Preston, Stuart and Susan


Quarterly Statement

Page 11 of 14

Portfolio Detail, As Of Date - 3/31/2013 Account Number

Units

Price

Cost

Portfolio Composition

Value *

Equity All Cap Equity DFA US Core II

654654654

76,095.99

$13.63

All Cap Equity Total:

$765,012.03

$1,037,188.38

35.10 %

$765,012.03

$1,037,188.38

35.10 %

$472,945.63

$470,727.15

15.93 %

$472,945.63

$470,727.15

15.93 %

Intl Large Blend DFA International Core

654654654

42,331.58

$11.12

Intl Large Blend Total:

Commodity SPDR Gold Trust

654654654

300.00

$154.47

$36,590.97

$46,341.00

1.57 %

DFA Commodity Strategy

654654654

10,758.00

$9.10

$105,048.00

$97,897.83

3.31 %

$141,638.97

$144,238.83

4.88 %

$106,906.65

$134,670.52

4.56 %

$106,906.65

$134,670.52

4.56 %

$97,667.41

$117,892.73

3.99 %

Emerging Mkt Total:

$97,667.41

$117,892.73

3.99 %

Equity Total:

$1,584,170.69

$1,904,717.61

64.45 %

Commodity Total:

Real Estate DFA Real Estate

654654654

4,762.04

$28.28 Real Estate Total:

Emerging Mkt DFA Emerging Markets Core

654654654

5,833.39

$20.21

Fixed Income Global Fixed Inc DFA Investment Grade Portfolio

654654654

4,708.10

$10.88

$50,024.00

$51,224.11

1.73 %

DFA 5-Year Global Fixed Income

654654654

31,121.35

$11.19

$340,233.49

$348,247.88

11.78 %

$390,257.49

$399,471.99

13.52 %

$85,690.19

$99,770.09

3.38 %

Global Fixed Inc Total:

Fixed Income DFA Inflation Protected

654654654

7,812.85

$12.77

Preston, Stuart and Susan


Quarterly Statement

Page 12 of 14

Portfolio Detail, As Of Date - 3/31/2013 Account Number DFA Short-Term Extended Quality

654654654

Units

Price

11,843.04

Cost $10.93

Portfolio Composition

Value *

$128,140.03

$129,444.41

4.38 %

$213,830.22

$229,214.50

7.76 %

$138,682.07

$140,170.86

4.74 %

Short Term Bond Total:

$138,682.07

$140,170.86

4.74 %

Fixed Income Total:

$742,769.78

$768,857.35

26.02 %

$88,504.39

$88,504.39

2.99 %

Money Market Total:

$88,504.39

$88,504.39

2.99 %

Money Market Total:

$88,504.39

$88,504.39

2.99 %

Stuart Preston PSP 5/1/2005 (QUAL) Total:

$2,549,796.46

$2,955,135.35

100.00 %

Account Total:

$2,549,796.46

$2,955,135.35

100.00 %

Fixed Income Total:

Short Term Bond DFA 1-Year Fixed Income

654654654

13,569.30

$10.33

Money Market Money Market TD Bank USA FDIC Insrd Deposit NC by SIPC

654654654

88,504.39

$1.00

* Including bond accrual

Preston, Stuart and Susan


Quarterly Statement

Page 13 of 14

Report Disclaimer Performance Evaluation Disclosure This report has been prepared from data believed to be reliable, but no representation is made as to its accuracy or completeness. Past performance is no assurance of future results. Performance is reflected net of advisory and Orion audit fees. Total return and principal value will vary. This information is provided to you in combined form, solely for your convenience and ease of review. If your objective and/or risk classification has changed, please notify us immediately.

BENCHMARK INFO Barclays Capital 1-5 Year Gov-Credit The Barclays Capital 1-5 Year Gov/Credit Bond Index is a 1-5 year component of the U.S. Government/Credit Index. This index includes securities in the Government and Credit Indexes. The Government index includes Treasuries (public obligations of the U.S. Treasury that have remaining maturities of more than one year) and agencies (publicly issued debt of U.S. Government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. Government). The Credit index includes publicly issued U.S. corporate and foreign debentures and Securities notes that meet specified maturity, liquidation and quality requirements. Barclays Capital Global Aggregate Bond The Barclays Capital Global Aggregate Bond Index provides a broad-based measure of the global investment-grade fixed-rate debt markets. The Global Aggregate index contains three major components - the U.S. Aggregate Index, the Pan-European Aggregate Index, and the Asian-Pacific Aggregate index. The Global Aggregate Index family includes a wide range of standard and customized sub-indices by liquidity constraint, sector, quality and maturity. Standard & Poors 500 The Standard and Poors 500 Index (S&P 500) is a group of investments that can be used as a yardstick to measure other similar investments. The Standard & Poor's 500 is an index of 500 stocks measuring the performance of the growth and the value styles of investing in large cap U.S. Stocks. It is often used as a standard measure in assessing the performance of large company stocks. Russell 2000 Value The Russell 2000 Value index is constructed to provide a comprehensive and unbiased barometer of the small-cap value segment of the US Equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity and that the represented companies continue to reflect value characteristics. MSCI EAFE Morgan Stanley Capital International â&#x20AC;&#x201C; Europe, Australia, Far East. The MSCI EAFE International Index is compiled from 21 other stock market indexes representing the major markets of the world, excluding the United States. It is generally used as a measure of stock market performance outside of the US. MSCI EAFE Small Cap The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the US & Canada. The MSCI Small Cap Index targets 40% of the eligible Small Cap universe within each industry group within each country. MSCI defines the Small Cap universe as all listed securities with a market capitalization in the range of USD $200 â&#x20AC;&#x201C; $1,500 million. MSCI Emerging Markets The MSCI Emerging markets index is a US dollar denominated index comprised of stocks of countries with below average per capita GDP as defined by the World Bank, foreign ownership restrictions, a lax regulatory environment, and greater perceived market risk than in the developed countries. Within this index, MSCI aims to capture an aggregate of 60% of local market capitalization.

PATHWAYS FINANCIAL PARTNERS DISCLOSURE INFORMATION Form ADV Part II and Schedule F Offering

Preston, Stuart and Susan


Quarterly Statement

Page 14 of 14

Form ADV Part II and Schedule F comprise our part of our disclosure documents. These forms provide important information about our firm, business and personnel. By this notice we offer to send a copy of our most recent disclosure document to you upon request, since the current form may vary from your initial copy. Miscellaneous Charges Miscellaneous Charges include TD Ameritrade expenses such as trading and custody fees. Orionâ&#x20AC;&#x2122;s quarterly third party fee is also included within this category and includes auditing and administrative expenses that are charged to the clientâ&#x20AC;&#x2122;s account.

4/11/2013 4:29:19 PM

Preston, Stuart and Susan


How to Review Your Performance Report Online

If you are looking for a performance evaluation (which is what you see when you come in for your Regular Progress meetings); you will want to go to the website for our 3rd party review service, Orion. The web address is: www.advisorlynx.com

If you need a new login /password for either client site, please email Christina Boyd (cboyd@2pathways.com)


How to Review Your TD Ameritrade Accounts Online

Go straight to TD Ameritrade for copies of statements, trade confirmations, or 1099s The web address is: www.advisorclient.com

If you need a new login /password for either client site, please email Christina Boyd (cboyd@2pathways.com)


Disclosure Information ƒ ƒ ƒ ƒ ƒ

All portfolio performance data was directly obtained from TD Ameritrade and Orion Advisor Services. Pathways Financial Partners is not responsible for inaccurately reported data. Portfolio performance data is reported net of annual investment expenses and all advisory fees that apply. All portfolio performance and market value data is for the time period ending March 31, 2013. Past performance is no guarantee of future results, and there is always the risk that an investor may lose money.


Pathways Sample Client Presentation 1Q13