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Presented by Ruth M. Matt, CFP ®Fore River Financial, 22 Free St, Suite

201, Portland, ME 04102207-450-5032

Fourth Quarter 2013Market Overview

Economic Summary: Fourth Quarter 2013

• Milestones– Equity markets hit all-time high (again)– U.S. government partially shuts down, sparking default fears– Janet Yellen nominated to head Federal Reserve– Federal Reserve announces tapering– China to allow private investors to own 15% of state enterprises– U.S. soon to be world’s biggest oil producer, IEA says– IPO raises at least $1.8B for Twitter– NSA spying puts pressure on EU-U.S. trade talks– House overwhelmingly approves budget deal– American Airlines returns to Wall Street– 100,000 Ukrainian protesters demand agreement with EU

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.

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.

Q4 2013: S&P 500 Index and Dow Jones Industrial Average

Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

Stock Price Averages: Dow Jones 30 Industrials, NYSE

Standard & Poor's 500 Stock Price Index

OCTSEPAUGJULJUN11

MAYAPRMARFEBJANDECNOVSources: Dow Jones, Wall Street Journal /Haver Analytics

13000

12500

12000

11500

11000

10500

1425

1350

1275

1200

1125

1050

Stock Price Averages: Dow Jones 30 Industrials, NYSE

Standard & Poor's 500 Stock Price Index

DECNOVOCTSEPAUGJULJUN13

MAYAPRMARFEBJANSources: Dow Jones, Wall Street Journal /Haver Analytics

17000

16000

15000

14000

13000

1875

1800

1725

1650

1575

1500

1425

Q4 2013: Equity Returns by Style

Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

Value Blend Growth

Large 10.01 10.23 10.44

Mid 8.56 8.39 8.23

Small 8.17 8.72 9.30

Source: Commonwealth Asset Management/Morningstar Direct

Large Growth

Large Blend

Large Value

Mid Growth

Mid Blend

Mid Value

Small Growth

Small Blend

Small Value

12.35 12.43 12.88

14.83 14.23 13.89

17.5216.68 16.05

3-year volatility in returns

Q4 2013: Fixed Income Returns by Style

Indices are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

2009 2010 2011 2012 Q4High-Yield

57.51High-Yield

15.19

U.S. Treasury

9.81

Emerging Markets18.62

High-Yield3.50

Emerging Markets28.78

Emerging Markets12.24

Corporates8.15

High-Yield15.59

Emerging Markets

1.32

Corporates18.68

Corporates9.00

Emerging Markets

8.02

Foreign Sovereign

13.97

Corporates1.11

Foreign Sovereign

11.64

U.S. Core6.54

U.S. Core7.84

Corporates9.82

Foreign Sovereign

1.10

U.S. Core5.93

U.S. Treasury

5.87

Mortgage6.14

U.S. Core4.21

U.S. Core−0.14

Mortgage5.76

Mortgage5.67

Foreign Sovereign

4.78

Mortgage2.59

Mortgage−0.47

U.S. Treasury

−3.57

Foreign Sovereign

4.05

High-Yield4.38

U.S. Treasury

1.99

U.S. Treasury

−0.75

Source: Commonwealth Asset Management/Morningstar Direct

2.112.75

3.43

4.49

6.52 6.67

8.14

3-year volatility in returns

Fixed Income

Treasury Yields

Yield up = Price down

10-Year Treasury Note Yield at Constant Maturity

Avg, % p.a.

131211Source: Federal Reserve Board /Haver Analytics

4.0

3.5

3.0

2.5

2.0

1.5

1.0

4.0

3.5

3.0

2.5

2.0

1.5

1.0

Fixed Income

Past performance is no guarantee of future results.

Current Level

High Yield SpreadBOA ML HY Master - 10-year US Treasury

131211100908070605Source: Haver Analytics

24

20

16

12

8

4

0

24

20

16

12

8

4

0

Fixed Income continued

Past performance is no guarantee of future results.

Announcement

BofA Merrill Lynch Municipal Master Index: Yield to Worst

%

1312111009Source: Bank of America Merrill Lynch /Haver Analytics

5.0

4.5

4.0

3.5

3.0

2.5

2.0

5.0

4.5

4.0

3.5

3.0

2.5

2.0

Fixed Income continued

Past performance is no guarantee of future results.

Announcement

BBB Municipal Yield - BBB Corporate Yield

1312111009Source: Haver Analytics

2.25

1.50

0.75

0.00

-0.75

-1.50

-2.25

2.25

1.50

0.75

0.00

-0.75

-1.50

-2.25

Housing

Housing: Prices and Supply

CoreLogic National House Price Index [+6]% Change - Year to Year NSA, Jan-00=100

1-family homes sold/1-family homes for sale

141312111009080706050403020100Source: Haver Analytics

20

10

0

-10

-20

3.5

3.0

2.5

2.0

1.5

1.0

0.5

r = 0.92

Housing: Prices and Supply continued

Homes Foreclosed: USANSA, per 10,000 Homes

131211100908070605040302010099Sources: Zillow.com /Haver Analytics

8

7

6

5

4

3

12

10

8

6

4

2

0

Credit and Banking

Credit and Banking: TED Spread

TED Spread

(3-mo LIBOR minus 3-mo t-bill)

1312111009Source: Haver Analytics

1.0

0.8

0.6

0.4

0.2

0.0

1.0

0.8

0.6

0.4

0.2

0.0

Credit and Banking: InflationVelocity of Money: Ratio of Nominal GDP to Money Supply M2

% Change - Year to Year Ratio

CPI-U: All Items, 1982-84=100Y/Y %Change

10050095Sources: MA/FRB/H, BLS /Haver

8

4

0

-4

-8

-12

-16

6

4

2

0

-2

-4

r = 0.44

Employment

Change in Nonfarm Payrolls

Source: Commonwealth Asset Management/Bloomberg

Strong!

Unemployment Rate

U-6 Unemployment Rate

SA,%

10050095Source: Bureau of Labor Statistics /Haver Analytics

18

16

14

12

10

8

6

18

16

14

12

10

8

6

Average Weekly Hours

Average Weekly Hours: Total Private Industries

SA, Hrs

1312111009080706Source: Bureau of Labor Statistics /Haver Analytics

34.8

34.6

34.4

34.2

34.0

33.8

34.8

34.6

34.4

34.2

34.0

33.8

Average Weekly Hours: Manufacturing

Average Weekly Hours: ManufacturingSA, Hrs

Average Weekly Overtime Hours: ManufacturingSA, Hrs

1312111009080706Sources: Bureau of Labor Statistics /Haver Analytics

41.0

40.5

40.0

39.5

39.0

38.5

3.50

3.25

3.00

2.75

2.50

2.25

2.00

Business and Manufacturing

ISM Manufacturing

ISM Mfg: PMI Composite Index

SA, 50+ = Econ Expand

13121110090807060504Source: Institute for Supply Management /Haver Analytics

67.5

60.0

52.5

45.0

37.5

30.0

67.5

60.0

52.5

45.0

37.5

30.0

Robust!

ISM Nonmanufacturing

Strong move!

ISM Nonmanufacturing: NMI Composite Index

SA, 50+=Increasing

13121110090807060504Source: Institute for Supply Management /Haver Analytics

65

60

55

50

45

40

35

65

60

55

50

45

40

35

Capacity Utilization

Capacity Utilization: Industry

SA, Percent of Capacity

100500959085Source: Federal Reserve Board /Haver Analytics

88

84

80

76

72

68

64

88

84

80

76

72

68

64

Gross Domestic Product% Change - Year to Year SAAR, Bil.$

Commonwealth Labor Index% Change - Year to Year

1005009590Source: Haver Analytics

10.0

7.5

5.0

2.5

0.0

-2.5

-5.0

12

8

4

0

-4

-8

Economic Expansion

Quantitative Easing

Stock Price Index: Standard & Poor's 500 Composite

Federal Reserve AssetsEOP, Mil.$

13121110090807060504Sources: Standard & Poor's, Federal Reserve Board /Haver Analytics

2000

1750

1500

1250

1000

750

4000000

3000000

2000000

1000000

0

Conclusions

• Job growth was strong in Q4; unemployment fell to 7 percent.• Inflation is not a large concern, for now.• ISM shows very strong readings.• Treasury rates closed out 2013 at two-year highs.• 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-percent range. • Manufacturing renaissance could continue with improvements

in employment.• High-yield spreads are approaching decade lows.

Looking Forward . . .

• Key themes to monitor– Yellen takes helm at the Fed– Earnings season for Q4 (beat or miss estimates?)– Is the housing recovery too much, too fast?– Is Europe poised for a continued recovery?– Ongoing debt ceiling debate in coming months– Direction of Treasury rates and impact on bond prices– Historical lows on many fixed income sectors, including

high-yield corporates

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.