July 1, 2016

Dear Friends,
Late last month England voted to leave the European Union. The move was unanticipated and gave
rise to a series of questions: What would happen to interest rates, to the existing trading agreements
between nations, to population migration patterns? In response to the widespread uncertainty, stock
markets around the world fell sharply.
We want to help preserve and enhance your wealth and thought about the actions we should take
because of these sudden geo-political episodic events. Is this a time to sell (because stock prices could
fall more)? Or, is this a time to buy (because the prices of many companies are now lower than they
were a short time ago)?
Our response was not to adopt either of these suggestions. Rather we decided to continue following
the course of action we said we would when you first gave us the privilege of managing some of your
money.
With the benefit of hindsight this was a correct decision. The loss lasted two days, and over the next
few days the S&P index, a popular proxy for the broad market average, recovered all of its initial loss.
On the 30th of June, the index was at approximately the same level it was at on the 23rd of June, one
week earlier.
We told you at the time you first came on board that our decision making process for selecting
securities and recommending the portfolio allocation that may best meet your needs has two major
components. The first component monitors the financial statements of over 4000 companies every
two weeks by utilizing an electronic data base maintained by Standard and Poors. Our proprietary
computer programs enable us to follow the quarterly changes in a firms financial statements and
compute the historical growth rates of relevant financial data in a thorough and cost effective way.
The second part of our decision making process enables us to back test and compare the past return
performance of different security selection strategies. For example, we can follow the performance
history of an investment strategy consisting of all companies with a current dividend yield over 3
percent, rising earnings, and a low debt to equity ratio. We can also compare these returns with those
of completely different strategies.
The performance records of different strategies change over time. No one strategy is consistently the
leader in every time period. Nor do all strategies usually move in the same direction; when some
drop in price, others rise. Over the past several months for example high income producing
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securities including bonds generated higher total returns than many other security groups. During
other periods in the not too distant past, high growth oriented strategies generated the highest
returns.
These data on strategy performance help us to detect and follow the ongoing changes in market
trends. They are therefore an important tool in determining the current portfolio asset allocation that
over time can point out the adjustments that could help you meet your changing needs.
At our regularly scheduled portfolio sessions we share information with you as to which strategies
are coming into favor and performing well and which are falling out of favor and lagging. We also
make suggestions as to what changes, in allocation may be appropriate so that they can continue to
meet your needs for current income and future price appreciation.
Please call if you would like to schedule a portfolio review session.

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.