2015 State of the Markets Presentation-Hall & Burns Wealth Management, LLC

Securities and Advisory Services offered through LPL Financial, Member FINRA/SIPC and a Registered Investment Advisor. Hall &
Burns Wealth Management and LPL Financial are separate companies.
5020 Weston Parkway, Suite 105, Cary, NC 27513 Phone: 919-228-6300 Fax: 919-228-6301 www.hallburns.com

LPL Financial does not provide tax or legal advice; consult your tax or legal advisor regarding your particular
situation.
The indices mentioned in this seminar are unmanaged and not available for direct investment. Past
performance is no guarantee of future results.
Opinions, estimates, forecasts, and statements of financial market trends that are based on current market
conditions constitute our judgment and are subject to change without notice. We believe the information
contained in this commentary has been obtained from sources that are reliable. This presentation is for
information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale
of any security.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named
representative, Broker dealer or Investment Advisor, and should not be construed as investment advice.
Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal
advice. All information is believed to be from reliable sources; however, we make no representation as to its
completeness or accuracy. Please consult your financial advisor for further information.
FORMALITIES
Securities and Advisory Services offered through LPL Financial, Member FINRA/SIPC and a
Registered Investment Advisor.
5020 Weston Parkway, Suite 105, Cary, NC 27513 Phone: 919-228-6300 Fax: 919-228-6301
www.hallburns.com

Putting the S&P 500 in Perspective
Factors Affecting the Stock Market in
2014
The U.S. Economy in 2014
2015 Forecasts
AGENDA

• Why didn’t my portfolio beat the index?
• Are stocks overpriced?
• Is another major correction imminent?
• Have we reached the all-time high?
BENCHMARKING THE S&P 500

COMPARING RETURNS ACROSS
ASSET CLASSES
Source: Russell, MSCI, Standard & Poor's, NAREIT, Barclay's Capital, JP Morgan. Diversification cannot assure a profit or protect against loss in declining markets.
2007 2008 2009 2010 2011 2012 2013 2014
MSCI Barclays MSCI Russell 2000 NAREIT Equity NAREIT Equity Russell 2000 NAREIT Equity
Emerging Markets Aggregate Bond Emerging Markets Growth REIT Index REIT Index Growth REIT Index
39.78% 5.24% 79.02% 29.09% 8.3% 19.7% 42.77% 28.0%
MSCI Diversified Russell 2000 NAREIT Equity Barclays MSCI Russell 2000 S&P 500
EAFE Portfolio Growth REIT Index Aggregate Bond Emerging Markets 37.23% Growth
11.17% -27.28% 34.47% 27.9% 7.84% 18.63% 13.01%
S&P 500 Russell 2000 MSCI Russell 2000 S&P 500 Russell 2000 Russell 2000 S&P 500
Growth Value EAFE 26.85% Growth Value Value 11.39%
9.13% -28.92% 31.78% 4.65% 18.05% 31.96%
Russell 2000 Russell 2000 S&P 500 Russell 2000 S&P 500 S&P 500 S&P 500 S&P 500
Growth -33.79% Growth Value 2.11% Value Growth Value
7.05% 31.57% 24.50% 17.68% 30.14% 9.61%
Barclays S&P 500 NAREIT Equity MSCI Diversified MSCI S&P 500 Diversified
Aggregate Bond Growth REIT Index Emerging Markets Portfolio EAFE 29.64% Portfolio
6.97% -34.92% 28.0% 19.20% 0.15% 17.32% 7.76%
Diversified S&P 500 Russell 2000 S&P 500 S&P 500 Russell 2000 S&P 500 Barclays
Portfolio -37.00% 27.17% Value Value 16.35% Value Aggregate Bond
5.70% 15.10% -0.48% 28.28% 6.00%
S&P 500 NAREIT Equity S&P 500 Diversified Russell 2000 S&P 500 MSCI Russell 2000
5.49% REIT Index 26.47% Portfolio Growth 16.00% EAFE Growth
-37.7% 15.40% -2.91% 23.30% 4.94%
S&P 500 Russell 2000 Diversified S&P 500 Russell 2000 S&P 500 Diversified Russell 2000
Value Growth Portfolio 15.06% -4.18% Growth Portfolio 4.90%
1.99% -38.54% 24.74% 14.61% 19.65%
Russell 2000 S&P 500 S&P 500 S&P 500 Russell 2000 Russell 2000 NAREIT Equity Russell 2000
-1.57% Value Value Growth Value Growth REIT Index Value
-39.22% 21.17% 15.05% -5.50% 14.59% 2.9% 2.15%
Russell 2000 MSCI Russell 2000 MSCI MSCI Diversified Barclays MSCI
Value EAFE Value EAFE EAFE Portfolio Aggregate Bond Emerging Markets
-9.78% -43.38% 20.58% 7.75% -12.14% 13.58% -2.00% -1.80%
NAREIT Equity MSCI Barclays Barclays MSCI Barclays MSCI MSCI
REIT Index Emerging Markets Aggregate Bond Aggregate Bond Emerging Markets Aggregate Bond Emerging Markets EAFE
-15.7% -53.18% 5.93% 6.54% -18.17% 4.21% -2.30% -4.50%

COMPARING RETURNS ACROSS
ASSET CLASSES
Source: Russell, MSCI, Standard & Poor's, NAREIT, Barclay's Capital, JP Morgan. Diversification cannot assure a profit or protect against loss in declining markets.
2008 2009 2010 2011 2012 2013 2014
Barclays MSCI Russell 2000 NAREIT Equity NAREIT Equity Russell 2000 NAREIT Equity
Aggregate Bond Emerging Markets Growth REIT Index REIT Index Growth REIT Index
5.24% 79.02% 29.09% 8.3% 19.7% 42.77% 28.0%
Diversified Russell 2000 NAREIT Equity Barclays MSCI Russell 2000 S&P 500
Portfolio Growth REIT Index Aggregate Bond Emerging Markets 37.23% Growth
-27.28% 34.47% 27.9% 7.84% 18.63% 13.01%
Russell 2000 MSCI Russell 2000 S&P 500 Russell 2000 Russell 2000 S&P 500
Value EAFE 26.85% Growth Value Value 11.39%
-28.92% 31.78% 4.65% 18.05% 31.96%
Russell 2000 S&P 500 Russell 2000 S&P 500 S&P 500 S&P 500 S&P 500
-33.79% Growth Value 2.11% Value Growth Value
31.57% 24.50% 17.68% 30.14% 9.61%
S&P 500 NAREIT Equity MSCI Diversified MSCI S&P 500 Diversified
Growth REIT Index Emerging Markets Portfolio EAFE 29.64% Portfolio
-34.92% 28.0% 19.20% 0.15% 17.32% 7.76%
S&P 500 Russell 2000 S&P 500 S&P 500 Russell 2000 S&P 500 Barclays
-37.00% 27.17% Value Value 16.35% Value Aggregate Bond
15.10% -0.48% 28.28% 6.00%
NAREIT Equity S&P 500 Diversified Russell 2000 S&P 500 MSCI Russell 2000
REIT Index 26.47% Portfolio Growth 16.00% EAFE Growth
-37.7% 15.40% -2.91% 23.30% 4.94%
Russell 2000 Diversified S&P 500 Russell 2000 S&P 500 Diversified Russell 2000
Growth Portfolio 15.06% -4.18% Growth Portfolio 4.90%
-38.54% 24.74% 14.61% 19.65%
S&P 500 S&P 500 S&P 500 Russell 2000 Russell 2000 NAREIT Equity Russell 2000
Value Value Growth Value Growth REIT Index Value
-39.22% 21.17% 15.05% -5.50% 14.59% 2.9% 2.15%
MSCI Russell 2000 MSCI MSCI Diversified Barclays MSCI
EAFE Value EAFE EAFE Portfolio Aggregate Bond Emerging Markets
-43.38% 20.58% 7.75% -12.14% 13.58% -2.00% -1.80%
MSCI Barclays Barclays MSCI Barclays MSCI MSCI
Emerging Markets Aggregate Bond Aggregate Bond Emerging Markets Aggregate Bond Emerging Markets EAFE
-53.18% 5.93% 6.54% -18.17% 4.21% -2.30% -4.50%
Why can’t you
perfectly
replicate index
performance?
 Liquidity
issues
 Transaction
costs
 Taxes
 RISK

DISCLOSURES
The indices mentioned on the previous slide are unmanaged and not available for direct investment. Past performance is no guarantee of future results. All data is
sourced from Yahoo Finance and MSCI unless otherwise noted. All data are as of 12/31/14.
The "Diversified Portfolio" model is a weighted average of the following: 25% in S&P 500, 25% in Barclay's Aggregate, 10% in Russell 2000, 10% in MSCI EAFE,
5% in MSCI EME, 5% in Russell 2000 Growth, 5% in Russell 2000 Value, 5% in S&P 500 Growth, 5% in S&P 500 Value, and 5% in NAREIT Equity REIT Index.
S&P 500 measures the performance of large capitalization U.S. stocks. The S&P 500 is a market-value-weighted index of 500 stocks that are traded on the NYSE,
AMEX, and NASDAQ. The weightings make each company’s influence on the Index performance directly proportional to that company’s market value.
S&P 500 Growth and S&P 500 Value measure the performance of the growth and value styles of investing in large cap U.S. stocks. The indices are constructed by
dividing the market capitalization of the S&P 500 Index into Growth and Value indices, using style “factors” to make the assignment. The Value Index contains those
S&P 500 securities with a greater-than-average value orientation, while the Growth Index contains those securities with a greater-than average growth orientation.
The indices are market-capitalization-weighted. The constituent securities are not mutually exclusive.
Russell 2000 measures the performance of small capitalization U.S. stocks. The Russell 2000 is a market-value-weighted index of the 2,000 smallest stocks in the
broad-market Russell 3000 Index. These securities are traded on the NYSE, AMEX, and NASDAQ.
Russell 2000 Value and Russell 2000 Growth measure the performance of the growth and value styles of investing in small cap U.S. stocks. The indices are
constructed by dividing the market capitalization of the Russell 2000 Index into Growth and Value indices, using style “factors” to make the assignment. The Value
Index contains those Russell 2000 securities with a greater-than-average value orientation, while the Growth Index contains those securities with a greater-than-
average growth orientation. Securities in the Value Index generally have lower price-to-book and price-earnings ratios than those in the Growth Index. The indices
are market-capitalization-weighted. The constituent securities are not mutually exclusive.
MSCI EAFE is a Morgan Stanley Capital International Index that is designed to measure the performance of the developed stock markets of Europe, Australasia,
and the Far East.
MSCI Emerging Markets is a Morgan Stanley Capital International Index that is designed to measure the performance of equity markets in 21 emerging countries
around the world.
NAREIT Equity REIT Index is a composite index of all tax-qualified real estate investment trusts (REITs) that are listed on the NYSE, the American Stock Exchange
or the NASDAQ National Market List.
Barclays Aggregate Bond Index (formerly the Lehman Brothers Aggregate Bond Index) includes U.S. government, corporate, and mortgage-backed securities with
maturities of at least one year.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
All index returns exclude reinvested dividends. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. Data Source: Yahoo Finance. All data as of December 31st, 2014.
2014 SNAPSHOT
1700
1750
1800
1850
1900
1950
2000
2050
2100
2150
D J F M A M J J A S O N D
S&P 500 - 2014 Performance
Dec 31 Close: 1,848.36
2013
Dec 31 Close: 2,058.9
2014
11.39%

1700
1750
1800
1850
1900
1950
2000
2050
2100
2150
D J F M A M J J A S O N D
S&P 500 - 2014 Performance
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
All index returns exclude reinvested dividends. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. Data Source: Yahoo Finance. All data as of December 31st, 2014.
MARKET EVENTS IN 2014
Fed Interest
Rate Hike
Jitters
Emerging
Markets Selloff
Ebola &
Europe
Oil Price
Declines

Source: BLS, FactSet, J.P. Morgan Asset Management.
Data are as of 12/31/14.
LABOR MARKET PERSPECTIVES

LOW GASOLINE PRICES GIVE
CONSUMERS A BREAK
$3.77 Jun
2014
$2.63 Dec
2014
$4.11 Jul
2008
Source: U.S. Energy Information Administration. As of 11/24/14

CORPORATIONS ARE FLUSH
WITH CASH
Source: Standard & Poor’s, FRB, Bloomberg, FactSet, J.P. Morgan Securities, J.P. Morgan Asset Management.
(Top left) Standard & Poor’s, FactSet, J.P. Morgan Asset Management.

Source: BLS.gov, online.wsj.com. Projections are based on opinions of analysts polled at the time of the survey. Survey conducted December 2014.
The Wall Street Journal surveys a group of economists throughout the year.
FEDERAL RESERVE RATE HIKES
0.11%
0.35%
0.96%
1.58%
2.23%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Federal Funds Rate
2007 - est. 2016
Actual
Forecast

Source: UBS U.S. Equity and Derivatives Strategy 2014 Outlook
RISING RATES AND STOCKS
1986 34.7% over 8 months

“Historically, bull markets lasting at least 4
years (since 1897) have only ended with a
recession—that is, they typically do not
end just because ‘everyone is too bullish.’”
Thomas Lee, Former Chief Equity Strategist, JP Morgan
EQUITIES AND THE ECONOMY

HOUSEHOLD FINANCES ARE
HEALTHIER
Source: BEA, FRB, J.P. Morgan Asset Management. *Revolving includes credit cards. **4Q14 household debt service ratio and 4Q14 household net worth are J.P.
Morgan Asset Management estimates. Values may not sum to 100% due to rounding. Data are as of 12/31/14.

IS THE NATIONAL DEBT
UNSUSTAINABLE?
1946: 113%
1974: 24%
Source: U.S. Treasury, BEA, CBO, St. Louis Fed, J.P. Morgan Asset Management.
Note: Years shown are fiscal years (Oct. 1 through Sep. 30). 2015 numbers are CBO estimates as of August 2014.

THE ECONOMIC RECOVERY
REMAINS STRONG
Source: The Conference Board, U.S. Federal Reserve as of 8/31/14.
1. The composite index of leading indicators is an index published monthly by the Conference Board, used to predict the direction of the economy’s movements to come.
The index is made up of 10 economic components, whose changes tend to predict changes in the overall economy. It is not possibly to invest directly in an index. Past
performance does not guarantee future results.

IS SENTIMENT TOO HIGH?
Source: University of Michigan, FactSet, J.P. Morgan Asset Management. Peak is defined as the highest index value before a series of lower lows, while a trough is
defined as the lowest index value before a series of higher highs. Subsequent 12-month S&P 500 returns are price returns only, which excludes dividends. Impact on
consumer sentiment is based on a multivariate monthly regression between 1/31/2000 – 5/31/2014. Data are as of 12/31/14.

INFLATION IS TAME
Source: BLS, FactSet, J.P. Morgan Asset Management.
Core CPI is defined as CPI excluding food and energy prices.

Name/Company 2015 S&P 500 Target
David Bianco, Deutsche Bank 2,150
Brian Belski, BMO 2,250
Jonathan Gilonna, Barclays 2,100
Tobias Levkovich, Citigroup 2,200
David Kostin, Goldman Sachs 2,100
Dan Greenhouse, BTIG 2,200
Jonathan Golub, RBC 2,325
Julian Emmanuel, UBS 2,225
Andrew Garthwaite, Credit Suisse 2,100
Savita Subramanian, BofA Merrill Lynch 2,200
Adam Parker, Morgan Stanley 2,275
John Stoltzfus, Oppenheimer 2,311
Tom Lee, FundStrat 2,325
GROUP AVERAGE 2,212 (7.45% growth)
Source: Business Insider, 2015
2015 FORECASTS

2015 INTEREST RATE FORECASTS
Source: Federal Reserve, FactSet, J.P. Morgan Asset Management
*Forecasts of 17 Federal Open Market Committee (FOMC) participants, midpoints of central tendency except for federal funds rate which is a medium estimate.

HISTORICAL S&P 500 GROWTH
PATTERNS
Source: Robert Shiller, FactSet, J.P. Morgan Asset Management. Data shown in log scale to best illustrate long-term index patterns. Past performance is not
indicative of future returns. Chart is for illustrative purposes only. Data are as of 12/31/14.

ARE STOCKS OVERVALUED?
Source: Standard & Poor’s, First Call, Compustat, FactSet, J.P. Morgan Asset Management. Dividend yield is calculated as the annualized dividend rate divided by price,
as provided by Compustat. Forward Price to Earnings Ratio is a bottom-up calculation based on the most recent S&P 500 Index price, divided by consensus estimates for
earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Returns are cumulative and based on S&P 500 Index price movement only, and do
not include the reinvestment of dividends. Past performance is not indicative of future returns. Data are as of 12/31/14.

BULL MARKET RETURNS
AND RECORD HIGHS
Source: Standard & Poor’s, J.P. Morgan Asset Management. Valuations are based on real earnings yield for the S&P 500 which is defined as (trailing four quarters of
reported earnings/price) - year over year core CPI inflation. Period after average valuation defined by 15-day moving average passing below average real earnings yield.
*As depicted on the left hand chart, the return to peak price for the current bull market is 0% as the S&P 500 has yet to cross its long run average real earnings yield. The
S&P 500 would need to appreciate over 22% to reach its long-term average real earnings yield of 2.5%. Data are as of 12/31/14.

INTRA-YEAR DIPS ARE NORMAL
Source: Standard & Poor’s, FactSet, J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. Intra-year drops refers to the
largest market drops from a peak to a trough during the year. For illustrative purposes only. *Returns shown are calendar year returns from 1980 to 2014.

THE PRESIDENTIAL CYCLE
REAL CHANGE IN S&P 500
Source: New York Times, Standard & Poor’s, Bureau of Labor Statistics, Bloomberg, Blue Chip Economic Indicators. Average GDP growth of 3.2% based on
figures for 1946 to 2010. Figures show total return, assuming reinvestment of dividends, adjusted for annual change in Consumer Price Index.

FOREIGN MARKET
OPPORTUNITIES
Source: MSCI, FactSet, J.P. Morgan Asset Management. Forward Price to Earnings Ratio is based on each index price, divided by consensus estimates for earnings per
share (EPS) in the next 12 months (NTM),and is provided by FactSet Market Aggregates. Past performance is not indicative of future returns. Data are as of 12/31/14.

DIVERGING INTEREST RATE
ENVIRONMENTS
Source: T. Rowe Price. As of September 30, 2014.Chart is for illustrative purposes only, and does not reflect actual interest rates. As of September 30, 2014.

A Mix of
Strategies
Passive
Management
Active
Management
Tactical Asset
Allocation
Tax-efficient
Investments
Diversification
Across Asset
ClassesDiversification
Within Asset
Classes
Global
Diversification
Alternative
Investments
Insurance
Estate
Planning
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against a loss in periods of declining value.
NO SINGLE SOLUTION

Experience The Difference
UNTIL NEXT TIME…
Securities and Advisory Services offered through LPL Financial, Member
FINRA/SIPC and a Registered Investment Advisor.
5020 Weston Parkway, Suite 105, Cary, NC 27513 Phone: 919-228-6300 Fax: 919-
228-6301 www.hallburns.com

2015 State of the Markets Presentation-Hall & Burns Wealth Management, LLC

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