Equity Approach Within our equity portfolio, we seek to provide superior performance over the long term while maintaining a low risk profile. The key to our equity approach is not limiting our investment universe to the traditional investment style boxes, but identifying opportunities wherever they exist. Our highly disciplined selection process begins with an in-depth analysis of the overall economic environment. Then, through rigorous industry and fundamental analysis, we search for catalysts that will contribute to the three main drivers of any company’s return: Earnings growth Price-to-earnings expansion Dividends Ultimately, if we believe these drivers have the potential to produce significant returns over a multi-year time frame, we purchase the security. Likewise, if certain factors begin to have a negative effect on these drivers or the stock becomes fully priced, we sell the security. We attempt to avoid undue risk and feel that concentrating on long-term results is more important than participating in short-term market swings. In times of favorable risk/reward opportunities, we focus our attention on common stocks. As risk levels increase, we shift the common stock emphasis to favor cash equivalents or short-term fixed income reserves to wait for better buying opportunities. The key to building wealth over time is avoiding the big downdrafts in the market and capitalizing on opportunities. Fixed-Income Approach On the fixed income side, we first look closely at various macroeconomic factors. These factors include monetary policy, yield curves, foreign currencies, politics, economic activity and inflation. Using this information, we then examine current and historical yield spreads and appropriate durations given the macroeconomic environment. Finally, we scrutinize the issuer, grade and overall risk level of specific fixed income issues. Depending on risk factors, we will utilize government and/or agency obligations, as well as municipal, corporate and convertible bonds when we think it is appropriate. Ultimately our objective is to seek the optimal balance between yield and risk.