1. The document discusses critical investor mistakes such as failing to establish an investment strategy, not devoting enough time to learning and research, and not diversifying assets. 2. It provides data showing that while stocks have averaged higher returns than inflation over the long run, individual investors have not achieved the same returns due to poor timing of investments and emotional reactions to market fluctuations. 3. The presentation emphasizes the importance of risk management, adapting portfolios to changing market conditions, diversifying across asset classes and investment styles, and working with a financial advisor.

1. & How to Avoid Them Presented by: Terry Elder, CFP Cash Flow Planners Critial Investor Mistakes

2. Important Disclosures The information presented herein does not consider your particular investment objectives or financial situation and does not make personalized recommendations. This information should not be construed as an offer to sell or a solicitation of an offer to buy any security. This material is not intended to replace the advice of a qualified tax adviser or legal counsel. Individuals should contact their own tax professionals and attorneys to help answer questions about specific situations or needs prior to taking any action based on this information. We believe the information provided is reliable, but do not guarantee its accuracy, timeliness, or completeness. Securities offered through Brokers International Financial Services LLC, Member FINRA/SIPC Absolute Capital Management is not affiliated with Brokers International Financial Services, LLC

3. Critical Investor Mistakes

4. Critical Mistake #1 Failing to establish a definitive game plan & investment strategy

5. Critical Mistake #2 Not devoting sufficient time to learning & research

6. Critical Mistake #3 Not taking action due to information overload

7. “ I don’t want to be poor.” (FEAR) “ I want to be rich!” (GREED) Critical Mistake #4 Falling prey to the “Mental Accounting” tendency $$$ ?

8. Critical Mistake #5 Falling prey to the “Loss Aversion” tendency

9. Critical Mistake #6 Using the “Rearview Mirror” technique

10. Critical Mistake #7 Not diversifying assets

11. The Potential Effects Source of chart data: Dalbar, Inc. Quantitative Analysis of Investor Behavior, July 2005 update. QAIB calculates investor returns as the change in assets, after excluding sales, redemptions and exchanges. Annualized return rate is calculated as the uniform rate that can be compounded annually for the period under consideration to produce the investor return dollars. Past performance does not guarantee future results. Stocks and bonds have different risks, where bonds, if held to maturity, may offer both a fixed rate of return and a fixed principal value. Past performance does not guarantee future results. Due to ongoing market volatility, current performance may be more or less than the results shown in this presentation. The performance information does not show the effects of income taxes on an individual’s investment. Taxes may reduce your actual investment returns or any gains you may realize if you sell your investment. An investor’s shares, when redeemed, may be worth more or less than the original cost. Investments Did Well, Investors Not So Well (Average Annual Returns 1985-2004) Source: Oppenheimer Funds, Pulse of the Market 2006 Stocks Average Inflation Equity Fund Investor As measured by the S&P 500 Index

12. You don’t have to do it alone!

13. The Importance of Risk Management Beyond "Returns"

14. Market Risk Is it just the “price of admission” to be invested in the market?

15. The Importance of Avoiding Big Losses -25% -75% -50% -33% 50% 100% 300% 33%

17. Risk and Reward: A New Perspective! An Asset-Allocated Portfolio May Have Given You Comparable Returns with Less Risk Indexes are unmanaged and one cannot invest directly in an index. Source of chart data: S&P Micropal. Risk is measured by annualized standard deviation of monthly total returns. Past performance does not guarantee future results. Based on an 80% Stock; 20% Bond Allocation For the 20-Year Period Ended December 31, 2005 For illustrative purposes only. Not indicative of any investment strategy used or recommended by Absolute Capital. Source: Franklin Templeton Investments

19. What’s Your Time Horizon? Annual Rolling Period Results for S&P 500 Index 1 (1926-12/30/05) 1. Source of chart data: Ned Davis Research, 12/30/05. Based on results for all investment periods beginning and ending within January 1926 and September 30, 2005, starting after each month-end. The S&P 500 Index is a broad-based index of U.S. stocks. The index is unmanaged, includes reinvested income, but not transaction costs or taxes, and cannot be purchased directly by investors. This chart is for illustrative purposes only and does not predict or depict the performance of any investment. Past performance does not guarantee future results. Due to ongoing market volatility, current performance may be more or less than the results shown in this presentation. The performance information does not show the effects of income taxes on an individual’s investment. Taxes may reduce your actual investment returns or any gains you may realize if you sell your investment. An investor’s shares, when redeemed, may be worth more or less than the original cost. Source: Oppenheimer Funds, Pulse of the Market 2006 15 78 3 Years 13 76 5 Years 1 71 10 Years 29 80 1 Year Periods with Loss Number of Periods Holding Period

20. Risk Perceptions Fear Greed Risk Management Solutions

21. to current market conditions Adapting Your Portfolio

22. Where to begin? Growth? Small Cap? BLEND? Value? Mid Cap? Large Cap? Stocks? Bonds ? High Yield? International ?

23. Master Asset Classes Domestic Equity International Equity Bonds Money Market (Stable Value)

25. Different Times, Different Styles Growth vs. Value (1996–2005) 1 1. Source of chart data: Standard and Poor’s Micropal Inc.,12/30/05. Growth performance is represented by the S&P BARRA Growth Index. Value performance is represented by the S&P BARRA Value Index. There are special risks in both styles: with growth investments, there is the possibility of increased volatility; with value investing, there is the possibility that the market may not recognize a stock as undervalued and it might not appreciate as expected. The indices are unmanaged, includes reinvested income and cannot be purchased directly by investors. This chart is for illustrative purposes only and does not predict or depict the performance of any investment. Diversification does not assure a profit or protect against loss. Past performance does not guarantee future results. Due to ongoing market volatility, current performance may be more or less than the results shown in this presentation. The performance information does not show the effects of income taxes on an individual’s investment. Taxes may reduce your actual investment returns or any gains you may realize if you sell your investment. An investor’s shares, when redeemed, may be worth more or less than the original cost. Growth Value Source: Oppenheimer Funds, Pulse of the Market 2006

27. Does It Matter Which Cap You Choose? Small Cap vs. Mid Cap vs. Large Cap (1996–12/30/05) 1 (Annual Returns) 2000 1998 1996 1997 1999 2001 Large cap Mid cap Small cap 2002 50% 0 – 30 – 20 – 10 10 20 30 40 2003 2004 2005 1. Source of chart data: Standard & Poor’s Micropal Inc., 12/30/05. Large-cap stocks are represented by the S&P 500 Index, a broad-based index of domestic stock; mid-cap stocks are represented by the S&P MidCap 400 Index; small-cap stocks are represented by the Russell 2000 Index. Returns are based on rolling 12-month index total returns. Indices include income, but not transaction costs or taxes, are unmanaged, and cannot be purchased directly by investors. Small-cap stocks may be subject to greater volatility than stocks of larger, more established companies. This chart is for illustrative purposes only and does not predict or depict the performance of any investment. Past performance does not guarantee future results. Due to ongoing market volatility, current performance may be more or less than the results shown in this presentation. The performance information does not show the effects of income taxes on an individual’s investment. Taxes may reduce your actual investment returns or any gains you may realize if you sell your investment. An investor’s shares, when redeemed, may be worth more or less than the original cost. Source: Oppenheimer Funds, Pulse of the Market 2006

28. The International Component Year S&P 500 MSCI-EAFE 1980 32.50 22.58 1981 (4.92) (2.28) 1982 21.55 (1.86) 1983 22.56 23.69 1984 6.27 7.38 1985 31.73 56.16 1986 18.66 69.44 1987 5.25 24.63 1988 16.56 28.27 1989 31.63 10.54 Annual Total Returns (%) of S&P 500 Index vs. MSCI EAFE Index 1980 - 2005 The 1980s Source: Federated Investors Performance data quoted represents past performance which is no guarantee of future results. Performance is based on total returns for 1-year periods ended 12/31. Total return represents the change in the value of an investment after reinvesting all income and capital gains. These indices are for illustrative purposes only and are not representative of any specific investment or the performance of any account managed by Absolute Capital. Actual investments cannot be made directly in an index. International investing involves special risks including currency risk, increased volatility of foreign securities, political risks, and differences in auditing and other financial standards. Diversification does not assure a profit nor protect against loss. Large Cap Stocks: The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in aggregate market value of 500 stocks representing all major industries. International Stocks: The Morgan Stanley Capital International Europe, Australasia, and Far East Index (EAFE) is an unmanaged market capitalization-weighted equity index comprising 20 of the 48 countries in the MSCI universe and representing the developed world outside of North America. Each MSCI country index is created separately, then aggregated, without change, into regional MSCI indices. EAFE performance data is calculated in U.S. dollars and in local currency. The 1990s Year S&P 500 MSCI-EAFE 1990 (3.11) (23.45) 1991 30.40 12.13 1992 7.61 (12.17) 1993 10.06 32.56 1994 1.31 7.78 1995 37.53 11.21 1996 22.95 6.05 1997 33.35 1.78 1998 28.60 20.00 1999 21.03 26.96 Current Decade Year S&P 500 MSCI-EAFE 2000 (9.10) (14.17) 2001 (11.88) (21.44) 2002 (22.09) (15.94) 2003 26.38 39.17 2004 10.87 20.25 2005 4.91 13.54

29. Asset Classes Have Rotated Over Time Annual Returns of Key Asset Classes 1986–2005 Source of data: Standard & Poor’s Micropal. Past performance does not guarantee future results. Indexes are unmanaged and one cannot invest directly in an index. Source: Franklin Templeton Investments

30. Example: Large Growth Source: Standard & Poor’s Micropal. Past performance does not guarantee future results. Indexes are unmanaged and one cannot invest directly in an index. Annual Returns of Key Asset Classes 1986–2005 Source: Franklin Templeton Investments

31. Simplify Your Life

32. The Step by Step Formula Assess Market Conditions Select Asset Classes for Investment Construct Diversified Portfolio (%) Analyze Available Investment Options / Select Managers Rebalance as Necessary Monitor & Respond to Changing Market Conditions

34. You don’t have to do it alone!

35. Professional Money Management

38. "The AssetAllocator"

41. Five Different Strategies Income Growth Core Conservative Domestic Equity 30% Bonds 70% Domestic Equity 35% Bonds 55% International Equity 10% Domestic Equity 50% Bonds 35% International Equity 15% Domestic Equity 65% Bonds 20% International Equity 15% Aggressive Growth Domestic Equity 65% International Equity 35%

42. So Many Choices! Growth? Small Cap? BLEND? Value? Mid Cap? Large Cap? Stocks? Bonds ? High Yield? International ?

43. Choosing the Correct Style Boxes Domestic International Bond Large Cap Value Large Cap Blend Large Cap Growth Mid Cap Value Mid Cap Blend Mid Cap Growth Small Cap Value Small Cap Blend Small Cap Growth Foreign World Europe Asia Japan Emerging Markets Investment Grade Corporate Bonds Government Bonds High Yield Corporate Bonds

45. Professional Investment Selection 105% more equity funds in 5 years! Source: Investment Company Institute

46. Positioning Your Investments Assess Market Conditions Select Asset Classes for Investment Construct Diversified Portfolio (%) Analyze Available Investment Options / Select Managers Rebalance as Necessary Monitor & Respond to Changing Market Conditions

47. Free Consultation

49. You don’t have to do it alone!

50. Important Disclosures Past performance is no guarantee of future results. Historical performance is not meant to represent the performance of any specific strategy or program. Investors cannot invest directly in an index. This update is subject to change and, although based upon information considered to be reliable, it is not guaranteed as to accuracy or completeness. This update is not meant as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client's accounts should or would be handled, as appropriate investment decisions depend upon the client's investment objectives. This update is for informational purposes only and does not constitute a complete description of our investment services or performance. Calculations that appear throughout this presentation are for demonstration purposes only. In addition, different assumptions will lead to different results. Nothing in this presentation should be interpreted to state or imply that past results are an indication of future performance. No one involved in the preparation of this presentation shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission thereof to the user.

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