Elevation Wealth Management\'s 4th Quarter 2011 Market Review

1. Barry Mendelson, CFP
Barry Mendelson CFP®
President & Financial Advisor
1399 Ygnacio Valley Road, Suite 24 Quarterly Market Review
y
Walnut Creek, CA 94598
Fourth Quarter 2011
925‐348‐5852 barry@elevationwm.com
elevationwm.com

2. U.S. & International Market Summary
Fourth Q t
F th Quarter 2011
U.S. Large U.S. U.S. U.S. REIT Int’l Value Int’l Small Emerging Global U.S. Gov/
/
Company Value Small Cap Stocks Stocks Stocks Markets 1‐5 Year Credit 1‐3
Stocks Stocks Stocks Stocks Bonds Year Bonds
+11.8%
+11 8% +13.1%
+13 1% +15.5%
+15 5% +15.4%
+15 4% +3.0%
+3 0% +0.7%
+0 7% +4.4%
+4 4% +0.4%
+0 4% +0.2%
+0 2%
U.S. STOCKS INTERNATIONAL STOCKS BONDS
Source: Morningstar Direct 2012. Market segment (Index representation) as follows: U.S. Large Company Stocks (S&P 500 Index); U.S. Small Company Stocks (Russell 2000 Index), U.S. Value Stocks
(Russell 1000 Value Index). U.S. Real Estate Market (Dow Jones U.S. Select REIT Index), International Developed (MSCI EAFE Index (net div.)), Emerging Markets (MSCI Emerging Markets Index
(gross div)), Global Bonds (Citi WGBI 1-5 Yr Hdg USD), US Bonds (BofA ML Corp & Govt 1-3 Yr TR). Source: Morningstar Direct. Indexes are unmanaged baskets of securities that are not available for
direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. All
investments involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and
financial reporting.

3. U.S. and International Market Indexes
Returns through December 31, 2011, Annualized for 5 and 10 Year Periods
Quarter
One Year Five Years Ten Years
to-Date
% % %
%
S&P 500 Index 11.8 2.1 -0.3 2.9
Russell 3000 Index 12.1 1.0 0.0 3.5
Russell 1000 Value Index 13.1 0.4 -2.6 3.9
Russell 2000 Index 15.5 -4.2 0.2 5.6
Dow Jones U.S. Select REIT Index 15.4 9.4 -2.0 10.1
MSCI World Ex. U.S. Value Index 3.0 -11.7 -5.5 5.5
MSCI World Ex. U.S. Small Cap Index
Ex U S 0.7
07 -15.8
15 8 -3.2
32 9.4
94
MSCI Emerging Markets Index 4.4 -18.4 2.4 13.9
WGBI 1-5 Years Hedged 0.4 2.3 3.9 3.6
BofA M ill L h U S C /G t I d 1-3 Years
B fA Merrill Lynch U.S. Corp/Govt Index 1 3 Y 0.2 1.6 3.9 3.6
Source: Morningstar Direct 2012. Market segment (Index representation) as follows: U.S. Large Company Stocks (S&P 500 Index); U.S. Small Company Stocks (Russell 2000 Index), U.S.
Value Stocks (Russell 1000 Value Index). U.S. Real Estate Market (Dow Jones U.S. Select REIT Index), International Developed (MSCI EAFE Index (net div.)), Emerging Markets (MSCI
Emerging Markets Index (gross div)) Global Bonds (Citi WGBI 1-5 Yr Hdg USD) U S Bonds (BofA ML Corp & Govt 1-3 Yr TR) Source: Morningstar Direct Indexes are unmanaged baskets of
div)), USD), U.S. TR). Direct.
securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is
not a guarantee of future results. All investments involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign
taxes, and different methods of accounting and financial reporting.
3

4. S&P 500 Daily Performance in 2011
S&P 500 Performance 2011 Aug 9: “If U.S.
Slides Into Dec 5:
D 5
Recession, “DeMark:
S&P 500 S&P 500 at
Could Drop to 1,330 by
Oct 31: MF
830” 4 Christmas” 7
Global
Bankruptcy5
Jun 8: Bill
Mar 20:
Jan 9: All 30 Gross:
“Crises in
Crises in
Experts “Treasury Dec 24: Wall
Japan ripple
Surveyed Investors St. Experts
across global
predict positive will get think stock
economy”2
year of +10.6%1 cooked” 3 Nov 29: prices will rise
American by more than
Airlines
Ai li 10% in 2012. 8
Bankruptcy6
Data source: Yahoo Finance. 1: “Stock outlook for 2011: Recovery rally will continue”, CNN Money, 1/9/11, 2: “Crises in Japan Ripple Across the Global Economy”, The New York Times, 3/20/11, 3: “Bill Gross: Treasury investors
will ‘get cooked’”, CNN Money, 6/8/11, 4: “If U.S. Slides Into Recession, S&P 500 Could Drop to 830”, Forbes, 8/9/11, 5: “The Unraveling of MF Global”, The Wall Street Journal, 12/31/11, 6: “American Airlines Parent AMR Files for
Bankruptcy”, Bloomberg, 11/29/11, 7: “DeMark: S&P 500 at 1,330 by Christmas”, Bloomberg, 12/5/11, 8:, “Pros See Stocks up in 2012, but Big Risks too”, Associated Press, 12/24/11. Indexes are unmanaged baskets of securities
that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. All investments
involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and financial reporting.

5. International Returns
International diversification is still key
Individual Country Returns 2011
Individual Country Returns 2011
Data source: Morningstar Direct. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual
portfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and
different methods of accounting and financial reporting. Diversification neither assures a profit nor guarantees against loss in a declining market.

6. Diversify Effectively
Ranking of Markets Around the World
Ranking of Markets Around the World
Ten‐Year Performance in US Dollars
Annualized Returns Year Ending December 31, 2011
1. Colombia 24. New Zealand
2. Indonesia 25. Hungary
3. Peru 26. Poland
4. Czech Republic 27. Sweden
5. Egypt 28. Hong Kong
6. Thailand 29. Switzerland
7. Brazil 30. Spain
8. South Africa 31. Israel
9. Chile
9 Chile 32. Austria
32 Austria
10. India 33. United Kingdom
11. China 34. Germany
12. Mexico 35. Taiwan
13. Morocco 36. Netherlands
14. Russia 37. Japan
p
15. Malaysia 38. France
16. Philippines 39. USA
17. Korea 40. Portugal
18. Norway 41. Belgium
19. Australia 42. Italy
20. Turkey 43. Finland
21. Singapore 44. Ireland
22. Canada 45. Greece
23. Denmark
Source: MSCI 2011 Map reflects countries in the MSCI provisional All Country World Index MSCI All Country World Small Cap Index, and MSCI Frontier Markets Index. Indexes are unmanaged baskets of securities that are not
2011. Index, Index Index
available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. All investments involve
risk, including loss of principal. Foreign securities involve additional risks, including foreign currency changes, political risks, foreign taxes, and different methods of accounting and financial reporting. Diversification neither
assures a profit nor guarantees against loss in a declining market.

7. Annual Returns
Lower than average, but still positive
Historical Annual Return, S&P 500
,
1972‐2011
2011:
+2.11%
Data source: Yahoo! Finance, returns of S&P 500. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the
management of an actual portfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal.

8. Quarterly Volatility
One of the worst historic quarterly returns was followed up by one of the best
Historical Quarterly Return, S&P 500
1972‐2011
Q4:
+11.82%
Q3:
‐13.87%
Data source: Yahoo! Finance, returns of S&P 500. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the
management of an actual portfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal.

9. Bull and Bear Markets
S&P 500 Inde (USD)
Index
Monthly Returns: January 1926–June 2011
116 mos.
491%
Average Duration Average Return
Bull Market: 32 Months Bull Market: 119%
Bear Market: 11 Months Bear Market: ‐27% 92 mos.
Months = Duration of Bull/Bear Market 355%
%=T t lR t
Total Return f the Bull/Bear Market
for th B ll/B M k t
61 mos.
282%
44 mos. 2 mos. 49 mos.
193% 92% 210%
6 mos.
6 mos
100%
3 mos. 23 mos.
26% 133% 61 mos.
48 mos.
4 mos. 9 mos. 43 mos. 9 mos. 33 mos. 108%
105%
12% 61% 90% 30 mos. 55% 30 mos.
86% 24 mos.
5 mos. 26 mos. 76% 15 mos. 71% 63%
22% 52% 35%
5 mos. Jun 2011
12% -8%
3 mos. 14 mos. 20 mos. 5 mos. 2 mos.
6 mos. 6 mos. 7 mos. 6 mos. 8 mos.
4 mos. ‐11% ‐14% 3 mos. ‐15%
‐30% 13 mos. ‐16% ‐22% ‐10% ‐22% ‐16% 19 mos. 21 mos.
‐17% ‐15%
‐29% ‐30% 25 mos.
2 mos. ‐50% 5 mos. ‐43% ‐45% 16 mos.
50% 31 mos.
31 mos
34 mos. ‐19% ‐15%
15% ‐51%
‐30%
‐83% 6 mos. Feb 2009
‐21%
4 mos.
‐10%
Indices are not available for direct investment; its performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee
of future results. The S&P data are provided by Standard & Poor’s Index Services Group. Bull and bear markets are defined in hindsight using cumulative monthly returns. A bear
market (1) begins with a negative monthly return, (2) must achieve a cumulative return less than or equal to ‐10%, and (3) ends at the most negative cumulative return prior to
achieving a positive cumulative return. All data points which are not considered part of a bear market are designated as a bull market.

10. Size and Value Effects Are Strong around the World
Annual Index Data
Annualized
Compound
Returns (%)
US US US US Emg. Emg. Emg. Emg.
Large S&P Large Small CRSP Small Intl. Intl. MSCI Intl. Markets Markets Markets Markets
Value 500 Growth Value 6-10 Growth Value Small EAFE Growth Value Small “Market” Growth
US Large US Small Non-US Developed Emerging
Capitalization Stocks Capitalization Stocks Markets Stocks Markets Stocks
1927–2010
1927 2010 1927–2010
1927 2010 1975–2010
1975 2010 1989–2010
1989 2010
Average Return (%) 14.03 11.88 11.35 19.17 15.98 13.95 18.48 19.17 13.67 11.29 25.01 21.98 19.46 17.05
Standard Deviation (%) 27.01 20.51 21.93 35.13 30.94 34.05 24.56 28.13 22.29 22.21 42.01 40.67 36.40 34.89
In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is
not a guarantee of future results. US value and growth index data (ex utilities) provided by Fama/French. The S&P data are provided by Standard & Poor’s Index Services Group. CRSP data
provided by the Center for Research in Security Prices, University of Chicago. International Value data provided by Fama/French from Bloomberg and MSCI securities data. International
Small data compiled by Dimensional from Bloomberg, StyleResearch, London Business School, and Nomura Securities data. MSCI EAFE Index is net of foreign withholding taxes on
dividends; copyright MSCI 2011, all rights reserved. Emerging markets index data simulated by Fama/French from countries in the IFC Investable Universe; simulations are free‐float
weighted both within each country and across all countries.
Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.
Past performance is not a guarantee of future results. Values change frequently and past performance may not be repeated. There is always the risk that an investor may lose money. Small
company risk: Securities of small firms are often less liquid than those of large companies. As a result, small company stocks may fluctuate relatively more in price. Emerging markets risk:
Numerous emerging countries have experienced serious, and potentially continuing, economic and political problems. Stock markets in many emerging countries are relatively small,
expensive, and risky. Foreigners are often limited in their ability to invest in, and withdraw assets from, these markets. Additional restrictions may be imposed under other conditions.
Foreign securities and currencies risk: Foreign securities prices may decline or fluctuate because of: (a) economic or political actions of foreign governments, and/or (b) less regulated or
liquid securities markets. Investors holding these securities are also exposed to foreign currency risk (the possibility that foreign currency will fluctuate in value against the US dollar).

11. Summary

12. Contact
Barry Mendelson, CFP®
President & Financial Advisor
1399 Ygnacio Valley Rd, Suite
1399 Ygnacio Valley Rd Suite
Walnut Creek, CA 94598
925‐348‐5852
barry@elevationwm.com
elevationwm.com

13. Disclosures
Opinions expressed are those of Barry Mendelson, CFP® and Elevation Wealth
Management.
This presentation should not be construed as investment advice.
This presentation should not be construed as investment advice
The information contained in this presentation is compiled from sources believed to
be reliable.
Investments in securities involve the risk of loss. Past performance is no guarantee of
future results.
The markets can remain irrational longer than you can remain solvent.