June 1, 2016

Dear Friends,
The current yield on a 2 year US Government bond is less than 1 percent, and the yield on a 10 year
US Government is less than 2 percent. These low rates on low risk investments led many investors
to look elsewhere to generate higher returns.
Two such alternatives were bonds comparable to those included in Barclays Capital High Yield
Bond Index and stocks comparable to those in Dow Jones Utility Index. From the January 1 of this
year through the end of last month the total return on Barclays High Yield fund, as measured by the
sum of both the dividend and capital gain, was 7.1 percent. The return of the Dow Jones Utility
index was 12.2 percent. The returns of both of these investments were substantially higher than
those of both low risk government bonds and the S&P 500 stock index.
We believe these are important facts for investors today to reflect upon because it is consistent with
old fashioned or traditional valuation criteria. Specifically, a high cash dividend can not only be a
support under the current price of a security but also be the reason for the stock price to increase
when competitive conditions are favorable.
Last week Janet Yellen, Chair of the Federal Reserve, made two important announcements touching
on these points. She said first It's appropriate ... for the Fed to gradually and cautiously increase
our overnight interest rate over time, and probably in the coming months such a move would be
appropriate".1 She added, from various data we monitor, economic growth looks to be picking
up.
Both of these remarks are important to stock and bond market investors. The current overnight
interest rate remains close to zero. Starting from this base, we believe any short term increase in
rates is likely to be nominal and should not adversely affect long run corporate decisions such as
plant and equipment outlays or dividend payments.
When Chairwoman Yellen went on to say that the data the Fed is looking at indicates economic
growth is picking up, we believe she is telling us that the cash flows corporations generate are
likely to increase over time. If old fashioned or traditional valuation criteria continue to apply, her

1 Janet Yellen speaks during a Radcliffe Day event at Harvard University in Cambridge, Massachusetts, on May 27, 2016.

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remarks augur well for both the value of your current portfolio and the value your future estate. In
effect, the market slowdown of the past year or two may be coming to an end.
Our goal is to preserve and enhance your wealth. Please call us and let us discuss any questions you
may have concerning your investment portfolio or any changes that may have taken place that could
impact your financial needs.
Also, please dont forget to take advantage of our complimentary services: our estate plan reviews
with Wayne Cooper and our insurance portfolio reviews lead by Peter Riskind.

Sincerely,

Eugene Lerner
Managing Director, Partner

JR Gondeck
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.