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October 7, 2015

Dear Friends,
The fluctuations in stock prices over the past several weeks created both opportunities and
challenges for investors. They also induced us to take several new initiatives on your behalf.
First, the recent stock market fluctuations gave rise to some unrealized losses in your portfolio.
During the early months of this year you realized substantial gains on many of your sales. If we
now sell some of your securities that have unrealized losses, we can reduce the taxes you owe on
your earlier gains. We plan to use a portion of the proceeds that arise from these sales to buy
securities that can appreciate in value from their current depressed levels.
Second, virtually every sector of the market was impacted by the recent price volatility, and we
are taking advantage of some of the many opportunities that now exist in the bond and stock
markets. For example, many listed companies can be thought of as being value oriented firms.
The driving forces behind the stock prices of these companies are their future dividends, their
current cash flow, selected balance sheet ratios, and similar financial variables. These variables
can serve as indicators of a floor below which the price of the stock is not likely to fall.
The increase in stock market volatility also reflects an overall change in market conditions which
is not likely to change quickly. Specifically, the liquidity of both the stock and bond prices for
many companies has dropped significantly. This is an important development because a cut
back in liquidity enables large price changes to arise from relatively modest changes in the
number of shares or bonds actually traded. Some of the factors behind this decrease in liquidity
include the Dodd-Frank rules and regulations, the widespread belief that interest rates are going
to rise, and the strains that are arising in our foreign affairs.
The impact of the drop in liquidity has placed a premium on our efforts to develop an estimate
of a reasonable floor for a companys stocks and bonds. In the last few weeks many of the
momentum or growth stocks experienced sharp declines in their share prices while many of our
value or equity income companies have risen. We believe these developments reflect the
ongoing changes in market flows. We plan to continue to monitor such changes in market
conditions because we want to continue our efforts to preserve and enhance your wealth
Sincerely,

Eugene Lerner
Managing Director, Partner

The Lerner Group is a group of investment professionals registered with HighTower Securities, LLC, member FINRA, MSRB and SIPC, and
with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC;
advisory services are offered through HighTower Advisors, LLC. This is not an offer to buy or sell securities. No investment process is free
of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past
performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein
may not be suitable for all investors. All data and information reference herein are from sources believed to be reliable. Any opinions,
news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not
constitute investment advice. The Lerner Group and HighTower shall not in any way be liable for claims, and make no expressed or
implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors
contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the
date referenced. Such data and information are subject to change without notice. This document was created for informational purposes
only; the opinions expressed are solely those of The Lerner Group and do not represent those of HighTower Advisors, LLC, or any of its
affiliates.

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