· I believe there is a direct relationship between return and risk. A higher return means greater risk. “If it sounds too good to be true, it is.”

· I measure risk using standard deviation. Most clients understand this better as volatility, the range of returns one might expect from an investment. The longer an investment will be held, the less important is its volatility during that time period.

· No investment should be made for a goal less than five years away. Funds that will be required within five years should be placed in money-markets or CDs or Treasury Bills with maturity dates equal to or less than the date they will be needed.

· Asset allocation is the primary determinant of a portfolio’s performance. The primary asset classes in most investment portfolios are stocks (equity), bonds (fixed income), and cash equivalents. Within each asset class, diversification is essential to reduce risk. Multi-asset class and multi-manager portfolios are most appropriate. Equity allocations are divided between domestic and foreign, large and small size companies, and growth and value styles. With the exception of REITs, it is difficult to diversify in real estate; I do not encourage my clients to become landlords unless they approach it as their primary business.

· I do not believe in market timing, that is, trying to guess when the market or a particular sector will be up or down. I believe in always maintaining a well diversified, properly allocated, balanced portfolio.

· The choice between active management and passive management (indexing) is not either/or. Indexing offers lower transaction costs, minimal asset class drift, and frequently a more tax-efficient portfolio. Active management may provide the opportunity for superior returns and controlled volatility.

· Picking stocks and bonds is a full time job. When employing active management, I use professional money managers – through mutual funds or separate account managers - to make the specific security selections for my clients’ investment portfolios.

· Clients need total return, not dividends or interest. The traditional concept of an “income” portfolio in retirement – a portfolio designed to match dividends and interest with cash flow – places inappropriate restrictions on portfolio design. In the long run, such a portfolio will likely fail to meet the client’s inflation adjusted cash flow needs.

· Tax issues must be considered in investment design. However, the goal of tax planning is to maximize after-tax returns, not to minimize taxes. For example, the after tax return of a taxable bond may exceed that of a non-taxable bond. In addition, investment issues such as risk exposure should take priority over taxes. For example, in most cases non-diversified low-basis stock should be sold.

NFP Securities, Inc. does not provide legal or tax advice. Any decisions whether to implement these ideas should be made by the client in consultation with professional financial, tax and legal counsel.

Diversification does not guarantee against loss. It is a method used to help manage investment risk.

Mutual funds are sold by prospectus only. For more information including expenses and charges, please read the enclosed prospectuses. Please carefully consider the investment objectives, risks, charges and expenses before investing or sending money as these factors will affect returns. The prospectus contains this and other information about the investment.