It is our promise to provide clients with personalized, comprehensive professional portfolio management. We understand that each client presents a unique set of needs, objectives, and investment experience. Our initial meeting with you will involve an in-depth fact-finding session to uncover the information necessary to build the best possible portfolio for your own set of personal needs.

Portfolio Design Process

We have developed a Four-Step Process to establish and construct unique portfolios that are appropriate for each client's distinctive set of circumstances.

Step l: Determine Client Objectives
The initial step in our personalized process is to familiarize our selves with the client and to determine each individual's objectives and circumstances. Together, we will identify your willingness and ability to take investment risk in order to achieve long-term goals. Also we learn about any portfolio requirements for income, growth objectives, and any estate or tax issues that may affect how the portfolio is structured.

Step. 2: Construct The Portfolio
Following this initial meeting, the CI management team designs an investment plan, with an asset allocation mix, that meets the investment goals of the portfolio. The design contains a strategic level of diversification among the asset classes under consideration. Once agreed upon this design becomes the foundation for constructing, executing and managing your portfolio. At each subsequent client meeting, the portfolio is reviewed with the portfolio manager to ensure that it continues to reflect accurately your goals, objectives and risk tolerance.

Step 3: Execution of the Investment Plan
Within the guidelines established with the client, CI's manager purchases shares of stock in those companies meeting our stock selection criteria. This process gets underway immediately and lasts for several months or longer depending on market conditions. Once completed, the equity portion of the client's portfolio will usually consist of 8 to 10 different stocks combined with other equity-based instruments that provide sufficient market exposure and diversification. The aggregate amount invested in equities will not exceed the maximum percentage allowed by the investment policy. Bonds are generally purchased in a shorter time frame, and a diversified portfolio of bonds will be purchased according to policy guidelines.

Step 4: Monitor the Investment Plan
We monitor the markets and portfolio positions on a daily basis. To meet your objectives, strategic and tactical adjustments to the portfolio will be made when deemed appropriate by the portfolio managers.. We use a combination of proprietary market indicators and fundamental data to reach recommendations on trading decisions for the individual components in the portfolio.

Finally, to ensure we remain current with our client's objectives, we encourage regular meetings.

Stock Selection Methodology

Strategy
The CI approach to stock selection is primarily "bottom up" in nature. Our method is to thoroughly investigate the dynamics of the companies we invest in and then identify a specific reason for investing in the securities of that company.

• We attempt to control investment risk by investing only in those companies we have personally researched.
• We attempt to leverage our knowledge by investing when expectations for the markets or our prospective investments are low.
• We are price sensitive, meaning we purchase stocks when they are trading at what we believe to be a significant discount to the company's underlying value.

Internal Research
Capital Ideas makes equity investments in our client portfolios only after we have fully reviewed internally generated research conducted by the CI management team and research staff.

External Research
CI executes trades through several brokerage firms. As a result, we have access to various sources of brokerage investment research and information. We also make use of third-party research purchased by or provided to us. Some of this research is a starting point for CI's internal research effort.

Screening Databases
Our portfolio managers begin with the 7,000+ stocks traded on the NYSE, AMEX, and NASDAQ. A sophisticated set of "screening processes" is used to help identify those stocks that meet our criteria and warrant further research.

A Bottom-Up Approach
CI's portfolio managers carefully examine each of the companies which pass our tests. The emphasis is on "bottom-up" stock selection. Specifically, we look for the existence of a specific catalyst that we believe will result in a higher market price for the company's securities over the next two years.

Final Selection
CI's management team discusses all stocks considered suitable for investment. When a consensus is reached, various models are used to determine buy and sell targets. Each stock is then evaluated for suitability and return potential before inclusion into a client portfolio.