l R e p o r t

A d vi s o r s Specia
Snide r D e c e m b e r 2008 • $7
.95

Advisors TM

Copyright ©2008 Snider Advisors • All Rights Reserved • 888.6SNIDER • www.snideradvisors.com


In This Report …
The shift to personal investing....................3
The Capital Appreciation Model.................3
Problems with the Capital Appreciation
Model.........................................................4
The number that matters...........................4
The quest for double digits.........................5
The mother of all reverse compounding
problems.....................................................5
The cash flow solution................................7
Capital appreciation versus cash flow
investing.....................................................7
Traditional solutions for income.................8
A new approach to income.........................9
What to look for.......................................10
The Snider Investment Method®..............11
Where to learn more................................11
About Kim Snider......................................12
Disclosures:...............................................13
How to not just survive, but thrive, in
turbulent financial markets
As Family CFO, you
are faced with many
difficult challenges.
 The company pensions, stable home equities and iron-
clad Social Security checks your parents and grandparents
counted on in retirement are now passé.
 Life expectancy in the 1930’s when Social Security was first
created was 63. Today, there is a high likelihood you may
live well into your 90s.
 A baseline standard of living is more costly than ever to
support.
 We are dependent on our portfolios to support that lifestyle
for thirty years in retirement.
 And to top it off, we know you will experience a serious
decline in portfolio values about once every five years, if
history is any guide.
Unfortunately, there are thousands of choices in the realm of
investment, and the proliferation of media sales pitches only adds
to the confusion. What’s more, different financial advisors will offer
different – sometimes contradictory – solutions. Whom to believe?
If you are like most people, you find the decision-making process
overwhelming – even more so as you near retirement, realizing that
one mistake could mean the difference between financial security
and financial catastrophe.
So how can you ensure your financial stability is not at the whim
of a volatile market or an unscrupulous advisor? Some have found
the solution by adjusting their objectives to focus on generating
a monthly cash flow from their portfolio, instead of buying and
holding for an eventual capital appreciation that may never come.
2
 How to not just survive, but thrive, in
turbulent financial markets

The shift to personal investing

Personal investing for retirement is a relatively new concept. The great-grandparents and grandparents
of Baby Boomers worked throughout their adult lives. The concept of retirement didn’t exist and life
expectancy after age 65 was short. What their great-grandparents passed to their grandparents, who in
turn passed to their parents, was – in all likelihood– not money or securities, but possessions: the family
home, land, businesses, furniture, jewelry and other personal heirlooms. Any cash savings their parents or
grandparents may have had was kept in a passbook savings account.

In 1965, stock market investments were rare. Less than 10 percent of Americans owned common stock.1
As late as 1983, that figure was still less than 20 percent.2 Our parents were guaranteed a lifetime income
by military and employer pension plans and Social Security. Even as life expectancy lengthened, healthcare
was affordable and subsidized by retiree health benefits and Medicare.

The world changed significantly in 1974 when Congress passed the Employee Retirement Income Security
Act, better known as ERISA. Contrary to its name, ERISA began the process whereby the burden and risk of
providing retirement income shifted away from employers and onto you, the employee. ERISA began the
inexorable shift away from a sure, if modest, retirement income toward an uncertain future based on high-
risk stock market investments in 401(k) plans and IRAs.

The Capital Appreciation Model

Capital appreciation is when you buy something in hopes it will go up in price. When it does, you sell it for
more than you paid for it, and the profit is called capital appreciation. This has been the way we invested
forever – buy and hope! It is probably the way you are invested right now.

Problems with the Capital Appreciation Model

The capital appreciation model ceased to be appropriate for most investors when Congress changed the
rules on us. A basic maxim of investment management is you must match your investments up to your
objectives, your time horizon and your tolerance for risk. When Congress put the burden of funding your
retirement squarely on your shoulders, they quietly changed your objective without asking your permission
or telling you they had done it.

1  Glassman, James K. “Can Americans Handle Their Own Retirement Investing Choices?” Washington, D.C.: American Enterprise Institute for Public Policy
Research, 1998. <http://www.aei.org/publications/pubID.15543,filter.all/pub_detail.asp > [accessed 22 July 2008]
2  Stevens, Paul Schott. “Mutual Fund Investing: The Power and Promise of a Simple Idea,” 2 August 2006, http://www.ici.org/issues/fserv/06_aust_stevens_
remarks.html [accessed 22 July 2008]

3
 How to not just survive, but thrive, in
turbulent financial markets

Chances are your investment objective is income replacement.

The goal of income replacement is to be able to replace the income from your job with the income from your portfolio
when you can’t or don’t want to work. But a traditional portfolio produces very little income. Imagine you have a $1
million dollar portfolio split 60 / 40 between stocks and bonds. That portfolio, on average, probably produces about
$20,000 a year in income3.

Lesson One: Match your investments to your objective, risk tolerance and time horizon. Just because everyone else is
doing it doesn’t mean you should be.

The number that matters

The goal for many investors is to build and maintain wealth. But what exactly is wealth? If you are a traditional capital
appreciation investor, it’s the market value of your portfolio at any given point in time. Your goal is to keep that
number growing. The day-to-day and month-to-month fluctuations in your account value translate directly into the
amount of wealth you have.

This focus, however, ignores what really matters to the individual investor. Rob Arnott, editor of Financial Analysts
Journal and highly respected investment manager, explains:

Unless you’re planning to spend the money right away, what really matters to most people is what kind of
spending their portfolio can sustain over their time horizon. If you’re a 50-year-old, it’s how much could you
spend annually for 30 or 40 years. If you’re a 20-year-old, your time horizon is longer, and if you’re 70, it’s
shorter…. People all too often think of their wealth as the value of their portfolio, which is a very simplistic and
incomplete definition.4

Wealth, according to this perspective, is your ability to maintain a certain standard of living indefinitely over time. It
isn’t measured by your portfolio’s account balance, but by the inflation-indexed income your portfolio can generate. If
that income is sufficient to sustain a decent standard of living, and it is growing faster than inflation, then you can say
you have achieved financial success.

Lesson Two: The true definition of wealth is the ability to support a given standard of living indefinitely into the future.

The quest for double digits

The Goal: To build a portfolio that generates an income that paces inflation, sustains growth and enables a reasonable
standard of living. It is highly likely the only way to achieve this target is through double-digit yield.

3  Assumes 5% yield on diversified bond portfolio

4  Arnott, Rob, interview with Kim Snider 15 Nov. 2007.

4
 How to not just survive, but thrive, in
turbulent financial markets

Why double digits? Take the following assumptions:

 Your retirement will last 30 years, the joint life expectancy of a 65-year-old, non-smoking couple.

 Inflation will average 3.5 percent annually over that 30 years.

 You need about 5% of your portfolio to achieve your desired standard of living.

 Your marginal tax bracket will be 33 percent.

 Stock market returns average roughly 10% and bond market returns average 5%.

To figure your required rate of return, add your withdrawal rate to the rate of inflation, divided by 1 minus your
marginal tax rate. The formula looks like this:

(w + i) ÷ (1-t)

When you plug in the numbers from the assumptions above, you get a gross average annualized return of 12.88
percent ([5 + 3.5] ÷ [1 - 0.33] = 12.88). The traditional retirement portfolio of 60 percent stocks and 40 percent
bonds has a targeted rate of return of 8 percent, which means there’s a gap between what we need and what most
retirement portfolios are set up to provide.

Lesson Three: For a portfolio to generate enough income to pay you, pay your taxes and keep up with inflation, without
running out of money or losing significant purchasing power in retirement, it must produce at least a double-digit yield.

The mother of all reverse compounding problems

The only proven way to achieve a passive double-digit yield to replace your income is to own businesses – either
directly or indirectly through common stock ownership. But this creates a challenge.

The chart below shows each of the bear market declines since the end of World War I. We are in the tenth decade and
there have been twenty bear market drops of 20% or more –about one every five years. If you want to get even more
specific, it is about sixteen months out of every sixty that we spend in bear markets. Of the twenty bear markets since
WWI, eight of them have had a drop of more than 40% in the S&P.

5
 How to not just survive, but thrive, in
turbulent financial markets

It is absolutely true stocks go up over the long run. But your time horizon isn’t the long run when your objective is
income replacement. You have bills to pay each and every month. When you are living off your portfolio, in order to
pay those bills each month, you must sell some of the stocks and bonds in the portfolio. Based on historical market
data, those sales will be at a loss a large percentage of the time. These regular losses create the mother of all reverse
compounding problems.

You know about the power of compounding right? Which would you rather have? A million dollars or a penny doubled
every day for thirty days?

Miraculously, a penny doubled thirty times is $5,368,709.12. But the bad news is it works the opposite in reverse. If
you sell assets at a loss, you get reverse compounding. If you have a $100K stock portfolio and it loses 50% of its value,
how much does it have to go up to get back to $100K? 100%! It has to double. That is reverse compounding.

The challenge is approximately one out every five years in the stock market is a down year. You have to sell off assets
every year in order to eat. So, in order to live off the portfolio, you are going to have to sell stuff at a loss on a fairly
regular basis. If those losses occur in the wrong order, it dramatically increases the chances of what academics call
retirement ruin – a nice euphemism for running out of money before you run out of breath. This is known as the
“sequencing of returns problem.”

Take, for example, the 17 year period from 1987 to 2003. The average return was 13.47%. Assume a portfolio of
100,000 taking $10,000 a year adjusted for inflation by 4% over those 17 years. Depending on the sequence of returns
which produce the 13.5% average, the ending portfolio balance could be as high as $76K or as low as negative $187K!
That is a big swing and obviously meaningful to your situation late in life.

6
 How to not just survive, but thrive, in
turbulent financial markets

Lesson Four: To avoid the sequencing of returns problem and negative compounding, an investor must avoid
permanent losses of capital at all costs.

The cash flow solution

Think about this. Most companies don’t go bankrupt because they are not profitable and they don’t go bankrupt
because the value of their assets has declined. They go bankrupt because they do not have sufficient cash flow to pay
their creditors.

A company can lose money on paper but stay in business indefinitely so long as it has sufficient cash flow to meet its
obligations. But without cash flow to pay employees, suppliers and creditors, a business’ days are numbered.

The same is true of your family. Most families that declare bankruptcy do so because the incoming cash flow, from
paychecks and other sources, is not sufficient to pay the bills. But as long as cash flow exceeds monthly obligations, a
family is fine.

So we know cash flow is the lifeblood of both companies and families. Doesn’t it make sense that your first priority as
Family CFO is to create sufficient cash flow to be able to meet your family’s obligations?

If your monthly living expenses are $9000 a month and your portfolio produces $12,000 a month in cash flow, you
would be able to live indefinitely on the yield irrespective of what the portfolio balance does. Under this scenario, you
can afford to wait out the markets ups and downs because you don’t have to sell anything to pay your bills.

Lesson Five: Portfolios that create enough income to avoid selling assets do not suffer from the sequencing of returns
problem like a capital appreciation portfolio does.

Capital appreciation versus cash flow investing

Capital appreciation is when you buy something in hopes it will go up in price. When it does, you sell it for more than
you paid for it, and the profit is called capital appreciation.

Cash flow is money that comes to you while you still own the asset. Examples of cash flow would be rent, royalties,
interest, dividends, and option premiums. The key characteristic of cash flow is that you do not have to sell the asset in
order to make money.

Cash flow comes from owning the asset. Capital appreciation comes from selling it – a problem when assets can and
do decline by 50% to 80%.

The bear market that began in October 2007 is the fifth bear market in twenty years. Contrary to public opinion,
business cycles have existed since businesses have existed and they will continue to cycle between boom and bust -
in spite of government’s best efforts to control or eliminate them. If you accept that as true, then ipso facto, capital
appreciation cannot work.

7
 How to not just survive, but thrive, in
turbulent financial markets

Just to summarize what we have covered so far:

 You need double digit yields to pay yourself, pay Uncle Sam and keep up with inflation in retirement.

 Owning businesses, either directly or indirectly through the stock market, is the only proven way to get double
digits over long periods of time.

 About every five years, the business cycle takes the market down with it.

 If you have to sell in order to realize profits to pay your bills, you will have to sell at a loss. This creates a
reverse compounding problem, which creates a high probability you will outlast your money.

 Even if you are lucky enough to reach the finish line with money to spare, the mere possibility creates
unacceptable levels of risk and anxiety.

Lesson Six: Cash flow is the most obvious answer to the problems of investing in markets that can and do decline
precipitously on a regular basis.

Traditional solutions for income

Investors seeking cash flow, or yield, from their portfolios have traditionally been limited in their investment choices.
Some of the most common options for the income portion of a portfolio are bonds and CDs, dividend-paying or
preferred stocks, and real estate. Some investors turn to annuities to generate regular income. Here’s a look at these
traditional approaches:

1. Bonds and CDs. These investments are typically safer than stocks (lower volatility and less chance -- sometimes zero
chance -- of a loss of principal), but they don’t generate the double-digit yield mandated above. Over the last 10 years,
the total return of the U.S. bond market has been approximately 5.5 percent. A five-year certificate of deposit paid
anywhere from 3.5 percent to 5.1 percent in 20085, and shorter maturities paid less.

2. Dividend-paying stocks. As of August 2008, the dividend yield on the S&P 500 was 2.4 percent.6 Some individual
companies around the same period were paying between 3.24 percent and 7 percent.7 Although several such
dividend-paying stocks are available, to create a diversified portfolio, you will have to settle for something close to the
average – which, again, is nowhere close to double digits.

3. Real estate. Many investors have created passive income through collecting rent on real estate properties they
own. Sometimes these yields can be in the double-digits. Real estate investing, however, brings with it a number of
challenges, such as maintenance and finding tenants, which may be a turn-off for the average investor. Conventional
wisdom contends that real estate investors get the best of both worlds – passive income plus capital appreciation,

5  “Markets Data Center Home -- Consumer Money Rates,” Wall Street Journal, 8 August 2008. <http://online.wsj.com/mdc/public/page/2_3021-bankrate.html?
mod=topnav_2_3000#bankrateB> [accessed 8 August 2008]
6  “Markets Data Center Home -- P/Es & Yields on Major Indexes,” Wall Street Journal, 8 August 2008. <http://online.wsj.com/mdc/public/page/2_3021-peyield.
html> [accessed 8 August 2008]
7  “Markets Data Center Home -- Top-Yielding Stocks,” Wall Street Journal, 8 August 2008. <http://online.wsj.com/mdc/public/page/2_3022-scandiv.
html?mod=topnav_2_3021> [accessed 8 August 2008]

8
 How to not just survive, but thrive, in
turbulent financial markets

but the crash of the mortgage market -- and home prices nationwide -- proves that this asset class isn’t immune to
downturns, either.

4. Annuities. These often-complicated products are backed by insurance companies and can be quite confusing.
Studies show that few annuity customers truly understand the products they’re buying. Annuities are either variable or
fixed, and they’re either immediate or deferred. They also come in thousands of varieties, making an apples-to-apples
comparison virtually impossible.8

Perhaps the simplest annuity to explain is the immediate fixed annuity. The fixed annuity promises the policyholder a
predetermined income for as long as they live, no matter how long that may be. (For example, you pay the insurance
company a lump sum of $100,000, and they promise you $3,000 to $6,000 per year.)

The advantage is that it provides the policyholder with a guaranteed cash flow indefinitely, provided the insurance
company remains solvent. The disadvantages are that the cash flow remains constant so purchasing power is reduced
by inflation, and when the policyholder dies, the remainder of the principal belongs to the insurance company. Also,
the return on investment is often limited. It’s highly likely that even a conservative investor can get better returns
elsewhere.

Lesson Seven: Traditional solutions for income just don’t have a high enough yield and may have other undesirable
characteristics as well.

A new approach to income

Fortunately, there is a relatively new approach to income investing that carries the potential for higher yields than the
traditional solutions, with a little additional risk. As stated earlier, there is no such thing as increased yields without
increased levels of risk. The goal of the new approach to income investing is to successfully manage and optimize the
trade-off between risk and reward.

The new approach involves the use of exchange-traded options on common stock. Option premium is passive income
received from the sale of options against an asset. Although some investment strategies involving options can
introduce high levels of risk, many conservative investors are finding that the options market can provide significant
income from their investments without excessive exposure to risk.

A recent survey by Charles Schwab found that 69 percent of its options customers considered option trading “a great
way to generate income,” and 56 percent said that option trading was part of their retirement investment strategy.9
Although some investors employ options to make highly leveraged bets on the future direction of price, others use
them to hedge their risks while generating income.

8  For a collection of articles on the advantages and disadvantages of annuities, see http://kimsnider.blogs.com/my_weblog/annuities/index.html.
9  Hadi, Mohammed. “Options Find Favor With Investors Seeking Strategies for Retirement.” Wall Street Journal 3 Jan 2007; C2. (registration required)<http://
online.wsj.com/article/SB116778575233765465-search.html> [accessed 14 August 2008].

9
 How to not just survive, but thrive, in
turbulent financial markets

Lesson Eight: Options are an important tool in your investor toolbox for managing risk and/or creating cash flow
from a portfolio. For more information about options, please call us for a free copy of our white paper, “Myths and
Misconceptions About Options” and access to our free online options training course, “Options Basics”.

What to look for

Strategies using options to generate income can be as simple as selling covered calls, while others add strict rules and
processes to manage income, emotions and risk. Investors looking to add an income-producing strategy using options
are urged to compare the risk/reward profiles of every strategy and pick one that matches his or her objectives, risk
tolerance, time horizon and temperament.

Some of the things to look for when evaluating options-based income strategies include:

1. Ease of use. Some strategies require the investor to make detailed charts and issue guesses based on possible
trends, while others offer a simpler, systematic approach that leaves no room for interpretation.

2. Ability to do it yourself. Does the strategy allow you to place trades in your own brokerage account, or do
you have to let someone manage your account for you? What are the fees involved? Studies show investment
success is more closely tied to low recurring investment costs than any other factor. Total transparency, which
comes from managing your own portfolio, is the best way to guard against conflict of interest.

3. Time commitment. Will you need to constantly watch your stock holdings, or can you spend the day away
from your computer screen? Do you need to take action or review your account daily, or can you check in
just once a month? Taking a more hands-on, time-intensive approach does not necessarily result in better
performance. Studies show the opposite is often true.

4. Focus on risk. Does the strategy employ tools and techniques to limit your risk exposure? Remember your
job is to manage and optimize the tradeoffs between risk and reward – to make certain that every unit of risk
produces the maximum benefit and the risks are those you can most afford to take and the rewards are those
that will be most beneficial. Make sure risk is handled with intention.

5. Verifiable track record. Does the strategy have a proven record, or is it just a set of tools and suggestions with
theoretical outcomes? Does the strategy’s support team make its performance record available and does that
record include every single trade since inception?

6. Quality customer support. Who do you call when you have a question? Is there a team of dedicated, licensed
advisors who can walk you through a process, or are you left to figure things out on your own?

Lesson Nine: Do your due diligence. There are many claims made. Make sure they are for real. Remember there are no
magic bullets or get rich quick schemes – only get poor quick schemes.

10
 The Snider Investment
Method

The Snider Investment Method®

The Snider Investment Method is a long-term investment strategy that uses a combination of stock, options and cash, along
with specific techniques that must be applied in a specific sequence. The overall goal is to exchange the long term 10%
return of the U.S. stock market for a more immediate and tangible 12% yield or cash flow.

The Snider Investment Method is designed to provide the following unique advantages:

• Higher income (yield) than other investments. The goal is to average a yield of 1% each month from your portfolio.
If you don’t need the money right away, you can reinvest it for compounding growth.10

• Management of risk. The goal is to buy stocks of fundamentally sound companies that you are willing to own for
long periods of time, even if they experience temporary price declines. Although the market value of your stocks
will fluctuate up and down, following the rules of the Snider Method helps to minimize the chance of selling stocks
for a loss due to an emotional reaction to market changes. The Snider Method also takes steps to minimize the risk
of permanent loss of principal caused by companies in your portfolio going bankrupt.

• Reduced fees when you do it yourself. You may choose to use our asset management or consulting services for
a fee. However, when you manage your money yourself, you don’t have to pay these fees, meaning more money
stays in your pocket to compound over time.

• Your interests come first. When you manage your own account, there is no conflict of interest. You don’t have to
wonder if your advisor is trading against you or recommending products because they offer him or her the highest
commission.

• Eliminate the guesswork. You follow a simple checklist that tells you exactly what to do each step of the way so
there’s no guesswork and less room for error. Instructions are as detailed as “click here, write this number there.”

• No Investment Experience Required. Snider Method investors vary in financial expertise from seasoned
professionals to outright novices who have never bought a stock before. Anyone can do it. You just have to want to.

• Time savings. Snider Method investors trade just one day each month and don’t need to be tied to a computer
every day the market is open to watch their portfolios.

• No Additional Courses Needed. All the necessary information is provided in one comprehensive investment
course. Students receive a workbook and a checklist so they can start using the Snider Method the day after they
graduate.

Where to learn more

For more information on Snider Advisors, the Snider Investment Method, or cash flow investing in general, please call
1-866-9-SNIDER (866-976-4337), or email info@snideradvisors.com. You can also read more on www.SniderAdvisors.com.

10  The disclosures at the end of this document explain these results in detail.  They are an important part of the presentation – please read them carefully.

11
 About Kim Snider

About Kim Snider

Kim is the Founder and President of Snider Advisors, an SEC Registered Investment Advisor. As of July 31,
2008, the firm manages approximately $110 million directly for clients using the Snider Investment Method®
and advises on an additional $385+ million managed by their extended family of Snider Investment Method
Workshop alumni. Kim developed the Snider Investment Method for her own use beginning in 1997. She has
been teaching it to others since 1999.

Snider Advisors was honored as one of the fastest-growing, privately held companies in the Dallas/Fort
Worth area in 2006 by the Caruth Institute for Entrepreneurship at SMU’s Cox School of Business. Snider
Advisors was also ranked No. 826 on Inc. Magazine’s 2008 ranking of the 5,000 fastest-growing private
companies in the country.

When she is not busy building and running Snider Advisors, Kim moonlights as an author, speaker and host
of Financial Success Coaching with Kim Snider, Saturdays at noon on KRLD NewsRadio 1080, a CBS affiliate in
Dallas - Fort Worth.

Kim’s blog, Kimmunications, is a repository for whatever happens to hit the front of her brain or pique her
ire on a given day. If you want to know what she thinks or knows about an issue, it is a pretty good bet she
has written about it and you can find it on her blog.

Speaking of writing, Kim’s first book, How to Be the Family CFO: Four Simple Steps to Put Your Financial
House in Order (Greenleaf), will be in bookstores October 1, 2008.

Kim is quickly becoming a go-to source on the topics of personal finance and investing. She has been
featured in the PBS Special, Finding the Rich Woman in You, with Kim Kiyosaki, which is currently running in
over 40 markets, as well as a local Emmy nominated series featuring Kim, Robert Kiyosaki and Suze Orman
titled Pay It Off. She has been quoted on various subjects related to personal finance and investing in more
than 80 daily newspapers, including the Los Angeles Times, Miami Herald, Boston Globe, The Dallas Morning
News and the Houston Chronicle.

Kim’s life prior to Snider Advisors was pretty diverse. She worked in senior management and senior executive
capacities within the hospitality, computer and telecommunications industry. She also made her living as an
options trader, and her great passion in life is playing polo.

Of course, we can’t forget her obligatory education and professional affiliations. She holds a Series 65 license
from FINRA for Registered Investment Advisor Representatives. She is a member of the National Speaker’s
Association and chairs its Investment Committee. And she holds a Bachelor of Science degree in Business
from the University of Colorado at Boulder.

Kim lives in Flower Mound, Texas, with her husband, Jim, and their two German Shepherds, Lexi and Dritte.

12
 Disclosures

Disclosures:
The opinions expressed should not be construed as financial, legal, tax or other advice and are provided for informational
purposes only. All investments involve risk, including possible loss of principal. Investment objectives, risks and other information
about the Snider Investment Method™ are contained in the Snider Investment Method Owner’s Manual. Read and consider
them carefully before investing.

Historical Performance. The yields quoted by Snider Advisors are based on a group of accounts we have been able to track and
verify, starting in September 2002, through September 2008. The average annualized yield for the entire sample was 13.5% after
transaction costs. Investors in accounts that can borrow on margin had annualized yields 4.3% higher than those in accounts
without margin (such as IRA’s). The average for margin accounts was 16% and the average for non-margin accounts was 11.7%.
Smaller accounts had annualized yields about 1.3% lower than the retirement-sized accounts (over $250,000). All terminated
accounts are included up to the last completed month. The annualized yield for each month in each account is weighted equally in
calculating the average.

Calculation of Yields. The yield calculation is different than the return calculation typically shown by most in the investment
industry. The yield calculation discussed herein includes reinvestment of option premiums, interest, dividends, and realized gains
or losses from closed positions, but excludes unrealized gains or losses from open positions. Yield also reflects a deduction of
brokerage commissions but does not reflect a deduction of any asset management fees paid to third-party managers (such fees
may vary). Investors who manage their own accounts using the Snider Method will not incur these asset management fees. The
percentage yield is the yield for the month divided by the Stake. The Stake is all contributions minus withdrawals, plus interest,
dividends and the profits from any closed positions. The yield is then multiplied by 12 to get an annualized rate. Any losses that are
realized in the transmogrification process are not reflected in the yield calculation. These losses are not taken out of the Stake but
transferred over to the cost basis of the new position. Note that some months are actually four weeks and some are five weeks,
and the first month of an account can be shorter or longer. No adjustment is made for these differences, which are expected to be
minor.

These yields are provided for illustrative purposes only. Results are not a guarantee of yields an investor would receive by investing
using the Snider Investment Method.

Factors That Can Affect Yields. The yields quoted were obtained by using methods substantially similar to those taught in the
Snider Method workshop. The yields of any one individual investor can be greater than or less than the average, and the average
of future periods can be greater than or less than the average of past periods. The Snider Method focuses on stocks that pass
well defined bankruptcy screening tests based on academic research. Within these stocks, the Snider Method selects those with a
liquid option market and high option premiums. The objective is to select stocks of companies with a low probability of bankruptcy
but higher-than-average price volatility. Option premiums are higher when interest rates and the anticipated future volatility of
stock prices are high. Both these factors have been low by historical standards over the time period measured, but they could be
higher or lower in the future.

Possibility of Losses. Investors who terminate positions prematurely can experience realized losses, sometimes greater than
the yield realized over the lifetime of the position. For this reason, investors should be able to leave the principal invested for a
minimum of two years. Some positions may not close within two years. Finally, the Snider Method involves investment in stocks. If
a company were to declare bankruptcy, there would be a permanent loss of the capital invested.

Regarding discussed results. The results quoted in this document are averages. Some investors do better than the average and
some do worse. Results are also past performance, and past performance is not indicative of future results.

Snider Advisors makes no representation that the information and opinions expressed are accurate, complete or current. The
opinions expressed should not be construed as financial, legal, tax or other advice and are provided for informational purposes
only. All investments involve risk, including possible loss of principal. Some yield figures are based on estimates and are subject to
change. The information contained herein is current as of the date hereof, but may become outdated or subsequently may change.
Past performance is not indicative of future results.

13