2015: A TURBULENT AND EVENTFUL YEAR

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ON THE ECONOMIC FRONTIER: A LOOK AT THE U.S. ECONOMY ENTERING THE NEW YEARAt Frontier, we know you trust us to keep an eye on macroeconomic trends and gauge how they might impact your investments. Therefore, we offer a brief look at the U.S. economy and investment markets in order to keep you informed.

NEWS & NOTESUpdates and news from our the Frontier offices.

ON THE COVER

WINTER 2016

DEPARTMENTS

4

11

4

2016 TAX GUIDELINESIRS changes for 201611

10

NEWS YOU CAN USEInteresting By the Numbers statistics and a handy chart for shopping trends

10

FEATURE8

8

5 NEW YEAR’S FINANCIAL RESOLUTIONS FOR 2016 If you’re struggling with a resolution like losing weight, eating healthier or exercising more, here’s an idea: try making some New Year’s financial resolutions. And no, it’s not too late — any time is a good time to resolve to improve your personal finances.

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4 | WINTER 2016 FRONTIER WEALTH MANAGEMENT

A LOOK AT THE U.S. ECONOMY ENTERING THE NEW YEAR

A TURBULENT AND EVENTFUL YEARThe year that just passed will probably go down as one of the more eventful and turbulent years in recent memory from an economic and investing standpoint. For example, 2015 was the year when:

¢ The Federal Reserve finally reversed course on its policy of holding interest rates at the near-zero level they’ve been at since 2008.

¢ The economy chugged along with steady but unimpressive growth for the sixth consecutive year.

¢ The stock market mostly moved sideways, finishing the year essentially flat.

¢ Oil and gasoline prices plunged to levels we haven’t seen in a decade, providing a pleasant surprise for consumers at the pump, but wreaking havoc on the energy industry and the stock market.

¢ The world’s second-largest economy, China, experienced major slowdowns in growth, sending economic tremors throughout the rest of the world, including here in the U.S.

At Frontier, we know everyone doesn’t have time to keep an eye on macroeconomic trends and gauge

how they might impact their investments. Therefore, we offer the following look at the U.S. economy

and investment markets in order to keep you informed about the most important trends that could

affect your finances and portfolio.

WINTER 2016 | 5

FED FINALLY PULLS THE TRIGGERLet’s start by discussing the Fed’s increase in the benchmark federal funds rate by 0.25 percentage points to 0.5 percent. The first interest rate hike by the Fed since 2006, this move was anticipated throughout most of the year, so it was a little anti-climactic when it finally happened on Dec. 16.

The rate hike got a lot of attention in the media, but practically speaking, it hasn't had a huge impact on most people — at least not yet. In comparison, it was 5.25 percent in 2007 before the Fed started lowering rates to try to stimulate the economy.

The shift in the Fed’s decade-long stance of holding interest rates at near-zero levels is more important than the impact of such a small rate increase. In announcing the hike, Fed officials

signaled that they believe the economy has strengthened enough to withstand higher interest rates. This, of course, is good news from an economic standpoint.

What the Fed does with regard to interest rates this year will depend primarily on how the economy performs. Its plan is to continue raising rates gradually by about 1 percentage point per year over the next three years, eventually bringing the federal funds rate up to 3.3 percent by 2019. However, if the economy continues to sputter and the stock market experiences volatility similar to what we have experienced so far in 2016, the Fed could abandon this plan. So it looks like 2016 will be another year of careful “Fed watching” by economists, investors and pundits.

'04 '06 '08 '10 '12 '14 '15

iPhone debuts

Last Fed rate hike

Barack Obama elected

China becomes second-biggest

economy

Obamareelected

Osama bin Laden

killed

Janet Yellen

becomes Fed Chair

Rate raised by

0.25%

5%

4%

3%

2%

1%

0

IT'S BEEN A MIGHTY LONG TIMETHE LAST TIME THE FED RAISED INTEREST RATES, FEW PEOPLE BROWSED THE WEB ON THEIR

PHONE, AND YOU'D PROBABLY NEVER HEARD OF TV'S MOST FAMOUS FAMILY

— MONEY.COM. SOURCES: ST. LOUIS FEDERAL RESERVE. MONEY RESEARCH

6 | WINTER 2016 FRONTIER WEALTH MANAGEMENT

SLOW GROWTH CONTINUESThe good news when it comes to growth is that the U.S. economy experienced its sixth consecutive year of growth in 2015, with gross domestic product (GDP) expanding by 2.4 percent last year.

The bad news is that this is well below the historical U.S. growth rate of 3.3 percent. In fact, last year was the 10th straight year in which U.S. GDP didn’t crack 3 percent, the longest such stretch since the end of World War II.

Unfortunately, 2015 was also a lackluster year for investors. In fact, an article published on BloombergBusiness.com on Dec. 28 called 2015 “The Year Nothing Worked: Stocks, Bonds, Cash Go Nowhere.” For the year, the S&P 500 lost 0.73 percent and the Dow Jones Industrial Average lost 2.23 percent. The NASDAQ was a rare bright spot, gaining 5.73 percent last year (excluding dividends).

Though the final year-end numbers for the major stock market indices were essentially flat, this doesn’t mean that 2015 was non-volatile. During a two-week period in August, the S&P 500 plunged by 11 percent, officially entering correction territory as the economic problems in China first became apparent. The market bounced back quickly, though, with the S&P 500 rebounding about 9.5 percent between Aug. 25 and the end of the year.

According to the BloombergBusiness.com article, 2015 was only the second year since 1995 in which one of the four main asset classes — stocks, bonds, cash and commodities — didn’t deliver returns of more than 10 percent. In addition to the S&P 500’s tepid -0.73 percent return, the 30-year U.S. Treasury bond finished the year -2 percent, the CRB Commodity Index -23 percent and 3-month Treasury bills were yielding a paltry 0.11 percent (excluding dividends).

Many analysts believe that uncertainty over the timing of the Fed’s interest rate hike served as a drag on the financial markets throughout most of last year. With the Fed now having played its hand and given indications about its plans going forward, this could potentially help smooth the waters for 2016.

4%

INDEX FUND ASSETS UNDER MANAGEMENT

THE INVESTING WAR IS OVER AND THE INDEX FUND WON

Some active mutual fund managers may know how

to make money in today’s market turmoil. But fewer

customers are giving them the chance to prove it.

FUND ASSET FLOWS 2008 – 2015

Net purchases of index funds

INDEX FUND SHARE OF MUTUAL FUND MARKET

34%

1995 2015

Net outflows of active funds

$1 TRILLION

$600 BILLION

$4 TRILLION

$55 BILLION

1995 2015

— Source: Fortune.com

WINTER 2016 | 7

LOOKING OVERSEASWhile the U.S. economy is trudging along with solid, yet unspectacular, growth, the rest of the world continues to lag behind. It’s becoming increasingly clear that China, parts of Europe and many emerging markets are dealing with protracted economic weaknesses. These served as another headwind that markets had to struggle against last year, and likely will continue to struggle against this year.

China has received the bulk of the headlines with regard to struggling overseas economies. China’s red-hot economy has cooled considerably, with growth slowing from double-digits over most of the past quarter-century to just 6.9 percent during the third quarter of last year. Beijing plans to set a new five-year average annual growth target of 6.5 percent — a tacit acknowledgement of the new economic reality China is facing.

The Chinese stock markets continue to take a beating, with reverberations being felt all over the world. In early January, trading on the Shanghai stock exchange was halted after just 30 minutes when the main index plunged 7 percent. China continues to devalue the yuan against the U.S. dollar in an effort to boost overseas demand for Chinese goods. But this also sends troubling economic signals to investors.

Meanwhile, emerging market economies like Turkey, South Africa and Brazil, which have economies correlated with China’s, are facing their own challenges. They benefited from low interest rates for years, but with rates on the rise, investors are starting to pull money out and their borrowing costs are rising. Making matters worse, their debts are denominated in a strengthening U.S. dollar.

PLUNGING OIL AND GAS PRICESOne of the biggest economic stories of last year was plunging oil and gasoline prices. Weak global demand for oil and high supply volume pushed the price of Brent crude oil down to $37.08 a barrel at the end of last year. For the sake of comparison, the price was $115.90 a barrel a year and a half earlier in June of 2014, according to NASDAQ. Meanwhile, low oil prices have pushed the national average price for gasoline down to below $2 per gallon for the first time since 2009.

Cheap oil and gas is a double-edge sword. Of course, it’s great news for us as consumers, as every dollar we don’t spend at the pump is a dollar we can spend on something else. And there’s also a psychological advantage to low gas prices — we tend to feel better about our financial situation when each fill-up costs us less.

However, to the extent that low prices reflect weak demand for oil, they are another sign of slow economic growth globally. Low oil prices are also damaging to oil-producing countries, energy companies and all of the ancillary industries that support the energy sector.

Of course, no one knows for certain what’s in store for the economy and investment markets for the remainder of 2016. Given the bumpy start in January, now is a good time to remember the importance of portfolio diversification and discipline when it comes to achieving your long-term financial and investing goals. u

$37.08

DECEMBER 2015

$115.90

JUNE 2014

FRONTIER WEALTH MANAGEMENT8 | WINTER 2016

This is one of the most common financial

resolutions, and for good reason: Excessive

and irresponsible debt is one of the biggest

hindrances to financial success for many

people. Think about it this way: Every dollar

that you’re paying toward bad debt is a

dollar that you can’t put toward a long-term

financial goal like retirement or your children’s

college educations.

NEW YEAR’S FINANCIAL RESOLUTIONS FOR 20165

This goes hand in hand with staying out of debt.

It won’t do you any good to manage your debt

effectively if you can’t control your spending.

Unlike the performance of your investment

portfolio or the rate of inflation, your

spending is the one financial variable in your

household that you can control. If you find

yourself consistently spending more money

Now that we're several weeks into

the new year, how are your New

Year’s resolutions coming along?

Despite the best of intentions, only about two-

thirds of people (64 percent) who make New

Year’s resolutions are still hanging in there

by the end of January. After six months, fewer

than half (46 percent) have still maintained

their resolutions.

If you’re struggling with a resolution like

losing weight, eating healthier or exercising more,

here’s an idea: Try making some New Year’s

financial resolutions. And no, it’s not too late —

any time is a good time to resolve to improve your

personal finances.

Here are 5 financial resolutions that could help

make 2016 your best financial year ever:

MANAGE YOUR DEBT EFFICIENTLY1.

CONTROL YOURSPENDING2.

WINTER 2016 | 9

MAX OUT YOUR RETIREMENT SAVINGS3.

than you probably should, sit down with

your spouse and come up with a plan to curb

your spending and bring it more in line with

your income or retirement distribution goals.

EVALUATE YOUR ASSET ALLOCATIONS4.

PLAN YOUR CHARITABLE CONTRIBUTION STRATEGY.5.

Regardless of the type of retirement account you

have, resolve to contribute as much money as

you possibly can to the account in 2016. Divide

the annual contribution limit by 12 and then

have this much money automatically transferred

into your retirement account each month. Or if

you’re paid biweekly, divide the contribution

limit by 26.

Your investment portfolio is not something you

should place on auto-pilot. Instead, plan to sit

down with your financial advisor to take a fresh

look at your current asset allocations and confirm

that they are still in line with your risk tolerance

and time horizon.

Over time, the mix of asset classes in your

portfolio will shift as the markets fluctuate.

This will affect your asset allocation — or the

percentage of your portfolio that consists of

stocks, bonds and cash instruments. When this

happens, it may be necessary to sell some asset

classes and buy others to bring your portfolio

back into the right balance to meet your long-

term investing goals.

You may have goals for how much money you’d

like to earn this year. But have you thought about

how much money you’d like to give? Many people

haven’t. You may also reap significant tax benefits

by giving away money and assets to qualified

charitable organizations.

One strategy adopted by many individuals and

families is to give away a certain percentage of your

pre-tax income. For example, many people donate

10 percent of their income — this is sometimes

referred to as the tithe, which literally means “the

tenth,” or 10 percent. Resolve to give money to

causes you’re passionate about this year — or to

give away more money if you’ve been a consistent

giver in the past.

Alternatively, a Donor Advised Fund (DAF)

could be established and funded now, while both

the intended charity and associated distribution

could be selected later. DAFs have become more

popular due to the flexibility, simplicity and tax

advantages they offer. Assets you want to give

away would be transferred to a public charity

or financial institution that would establish and

manage the fund. In the meantime, you would

retain the right to advise the fund with respect to

its investments or charitable distributions.

Contact us if you’d like to discuss your

financial resolutions and how we can help you

achieve them. u

FRONTIER WEALTH MANAGEMENT10 | WINTER 2016

news you can use.

MONTH WHAT TO BUY GREAT 2015 DEALS

JANUARYTVs and electronics, bedding,

linens, cookware, fitness

equipment

35 percent off brand-name

HDTVs at Best Buy

FEBRUARYWinter apparel and

accessories, appliances,

furniture, housewares

60 percent off

mattresses at J.C. Penney

MARCHNon-Apple smartphones,

running shoes, team apparel

53 percent off running shoes

at Joesnewbalanceoutlet.com

APRILHome, garden, and auto

supplies; spring clothing

40 percent off Craftsman

tools at Sears

MAYHome furnishings,

home goods

60 percent off clearance at

Williams-Sonoma Décor

JUNETools and home

improvement

57 percent off tools at

Home Depot

JULYSwim wear, summer

entertaining, air conditioners

37 percent off LG air

conditioners on Amazon

AUGUST Laptops, summer clothing $100 off Apple laptops

SEPTEMBERHome furnishings, outdoor

and patio goods, last

generation iPhones/iPads

50 percent off Strathmore

patio furniture at Amazon

OCTOBERDenim and fall fashion,

camping gear, sports

equipment

50 percent off Levi's jeans

at Macy's

NOVEMBERVideo games, consumer

electronics

Two-for-one PS4 and

Xbox games at Best Buy

DECEMBER Gift cards, toys73 percent off close-out toys

at Target

2 in 10 ...NUMBER OF COLLEGE

STUDENTS AND YOUNG

PROFESSIONALS FAMILIAR

WITH THE FINANCIAL

ADVISOR PROFESSION

MONTH-BY-MONTH SHOPPING PLANYOU CAN SET A BUNCH OF CALENDAR ALERTS, OR YOU CAN PRINT THIS

HANDY CHART, WHICH HIGHLIGHTS WHEN TO MAKE ALL YOUR PURCHASESBY THE NUMBERS

— MONEY.COM. SOURCES: DEALNEWS. FATWALLET

75 ... PERCENTAGE OF

THE WORKFORCE THAT

WILL BE MADE UP

OF MILLENNIALS

BY YEAR 2025

70 ...PERCENTAGE OF PEOPLE

TURNING 65 WHO

WILL NEED SOME

FORM OF LONG-

TERM CARE65

3 in 10 ...NUMBER OF

NEW HIRES

THAT COMES FROM

REFERRAL NETWORKS— JOURNAL OF FINANCIAL PLANNING

WINTER 2016 | 11

news & notes.

2016 tax guidelines.

ADDITION TO THE TEAM

T ammy Meier,

CPA, has

joined the Frontier

Team as a Tax

Specialist. Tammy

brings more than 20 years of

tax and accounting experience

to Frontier.

Tammy previously was

the owner of her own CPA

firm specializing in serving

closely held businesses and

their owners. She provided

tax compliance, planning and

consulting services, as well as

controller and CFO services

to her clients over the years.

Tammy also worked with

EKS&H and Eide Bailly CPA

firms in Denver, assisting with

more complicated tax return

preparation and review. She

began her career with Ernst &

Whinney, now Ernst & Young,

in both auditing and tax before

specializing in tax with Price

Waterhouse, now PwC. u

Tammy Meier, CPA

(Denver)

F rontier hosted a family Halloween bash, which included

trick-or-treating around the office, as well as putting

together "Happy Kits" for Children’s Mercy Hospital. Happy Kits

are composed of crayons, a coloring book, stickers and book.

We donated 48 Happy Kits and 48 Thanksgiving Craft Kits

to CMH in Kansas City. u

HALLOWEEN + PHILANTHROPY

MAXIMUM CONTRIBUTION LIMITS 2015 2016

401(k), 403(b), and most 457 Plans $18,000 $18,000

Age 50+ Catch-Up* Limit for 401(k), 403(b) and most 457 Plans $6,000 $6,000

SEP IRA $53,000 $53,000

SIMPLE IRAs $12,500 $12,500

Age 50+ Catch-Up* Limit for SIMPLE IRAs $3,000 $3,000

Roth IRA and Traditional IRA $5,500 $5,500

Age 50+ Catch-Up* Limit for IRAs $1,000 $1,000

GIFT & ESTATE TAX LIMITS 2015 2016

Gift Tax Exclusion** $14,000 $14,000

Federal Estate Tax Exemption*** $5,430,000 $5,450,000

In general, the retirement plan limitations

will not change from 2015 to 2016 because

the increase in the cost-of-living index did not

meet the statutory thresholds. However, the

federal estate tax exemption has increased from

$5,430,00 per person in 2015 to $5,450,000 per

person in 2016. u

IRS CHANGES FOR 2016

* The Age 50+ Catch-Up limit applies to those who obtained age 50 by Dec. 31 in the respective calendar tax year. ** Per donor, per recipient.*** Per decedent. With portability, the federal exemption amount for a couple was $10,860,000 in 2015 and is $10,900,000 for 2016.

The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC's

("Frontier") investment advisory services and general economic conditions are as of December 31, 2015. This information should

not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector

or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible

for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information.

Nothing in this newsletter is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice.

This information is subject to change without notice and should not be construed as a recommendation or investment advice. You

should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.

KANSAS CITY 4435 Main Street, Suite 1100Kansas City, MO 64111815.753.5100

ALBANY515-B1 N. Westover BoulevardAlbany, GA 31707229.888.5346

DENVER10375 Park Meadows Drive, Suite 500 Lone Tree, CO 80124303.770.0154

ST. LOUIS1401 S. Brentwood Boulevard, Suite 925St. Louis MO 63144314.762.6800

WICHITA1625 N. Waterfront Parkway, Suite 150Wichita, KS 67206316.689.8333