May 13, 2013:

PORTF5RMULA$ FORMULAIc TRENDING MQNEY MANAGERS

The Formulaic Trending Monthly Abstract

RAM Score = +56.51 Mapper ScoreTM = 6 of 10 increasing

The overall RAM Score has increased from +54.52 to +56.51 this month... And 6 of 10 Mapper ScoresTM (yes, we have added 4 additionalindexes to our Mapper Score System) are increasing while 1 has flat-lined, meaning 3 have declined.

What has really caught my eye (and ears) this month is a two-fold interconnected relationship.

First, the market has hit new highs (no doubt you have heard). But unlike any other time in history, the volatility and speed of the markets haschanged dramatically. Notice the two graphs below (S&P 500 and Dow 30) and most specifically, contrast the structure from years 1975-2000against the W pattern of years 2000-2013.

The stark differences are dramatic... This isnt your Grandfathers stock market anymore.

c--

Second, most professionals in-the-know are quietly exuberant regarding this bull market. You may have noticed there was little fanfareregarding the Dow 30 surpassing 15,000 or the S&P 500 surpassing 1,600 even though neither had ever happened before. Interesting...

-

Here is a sampling of measures illustrating potential market strength that most everyone else is too quietly exuberant to talk about:

1. Stocks have been outperforming bonds by a significant %, indicating that investors are rotating into stocks away from bonds.2. Recent volumes in put options has lagged volume in call options by 50%, indicating bullish money.3. The S&P 500 is almost 9% above its 125-day average.4. There has been almost 15% more trading volume on the NYSE is in advancing stocks vs. declining stocks.5. The number of stocks hitting new 52-week highs has continually exceeded those hitting 52-week lows for all of 2013.6. The VIX volatility index has experienced a declining trend since late 2012.7. The Federal Reserve is not tightening monetary policy.8. Stock price valuations are not stretched.

PORTFRMULAS FORMuLAIC TrwNn,Nc MoN MANAGER

Portformulas Investing CorporationFormulaic Trending Money Manager

SEC Registered Investment Advisor6020 E Fulton St. Ada, MI 49301

(888) 869-5994 - www.portformulas.net

0 RAM Score is a proprietary trending tool that takes into account several dynamic components related to the U.S. markets and economy. It features a corebaseline which allows for correlation between these multiple components so that they may be added together for an overall Ram Score. As a trending tool, webelieve that a positive RAM Score indicates that the odds are stacked in favor of equity investments and a negative RAM Score indicates that odds are stackedagainst equity investments. Mapper ScoreTM is a proprietary trending tool that takes into account several dynamic components related to the underlyingstocks represented within an index. It identifies certain strengths of individual stocks contained within an index and tracks how many meet minimumrequirements. As a trending tool, we believe that the higher the percentage of qualifying stocks, the greater the strength of the overall index. 9 Our scoringmechanisms do not guarantee that the markets will increase when scores are strong or decrease when the scores are weak. But we believe the long termcorrelation may be valuable for investing... Combining our trending features of RAM Score & Mapper ScoreTM with our Portformulas intricate FormulaicInvestingTM Strategies results in a uniquely logical approach to investing that is exclusively available through Portformulas.

Price History

14,OOQ.13,000.(12000.fI1,000.(1G,Qoo.9,000.G(8,000.G(7,000.Q(6,000.015,000.014,000.013,000,012,000.011,000.01

5 80 85 90 95 00 05

1,500.C1,400.C1,300.C1200.C1,100.ci,ooo.:900.00800.00700.00600.00500.00400.00300.00200.00100.00

5 80 85 90 95 00 05 5/9/2013

Page 1 of5

There is no investor euphoria (the premise of my making this list).Bond spreads have been shrinking.Economists do not believe a recession is looming.

Best of Investing,Mike Walters, CEO

,41o:;::I(kc

PURTFRMULAS. FonMutAic TnrNoNc MONEY MANAcwo

Portformulas Investing CorporationForm ulaic Trending Money Manager

SEC Registered Investment Advisor6020 E Fulton St. I Ada, MI 49301

(888) 869-5994 - www.portformulas.net

9.10.11.12.13.

PORTF5RMULAS FORMULAIc TRENDING MONEY MANAcER

Transportation stocks, small caps and bank stocks do not appear to be retreating.And, as you can see below, the inverse of the 4-Week Moving Avg. of Initial Jobless Claims is staying in almost perfect step with theS&P 500. In theory, meaning that this bull market is not just a Fed-driven phenomenon and that our economy really is supportingthis growth on its own merits.

-IC4WSAs&p 500 Stock Price Index (SP500)

1,760

1,645

-280,000

-320,000

-360,000 1,530

-400,000 1,415

-440,000 1,300

.

480000 1,185 .E

-520,000 1,070

-560,000 955

-600,000 840

-640,000 725

-680,000 6102014

Shaded areas indkate US recessions. I -IC4WSA (Left) IFRED 2013 researchstlouisfed.org (Right)2007 2008 2009 2010 2011 2012 2013

Re -CL*i#,47

ie

Obviously, there are never guarantees when investing in the market, but it is nice to know that the underpinnings appear solid. And as you willsee over the next few pages, our proprietary RAM Score and Mapper Score indicators seem to lend further support to the underpinnings.

Our unique approach of Formulaic Trending Money Management has brought us much attention and I hope that it continues to create muchvalue for you as an investor! At request of many, I have included the Freedom Series Portformula Performance Calculations for yourreference to compare our various Freedom investment models to their corresponding indices.

For more information you can visit www.portformulas.net or speak with your Financial Advisor (be sure to ask if the new Freedom Series isright for you and your investment goals).

1W/1

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Page 2 015

Iv $&(

PORTFRMULAS FORMuLAIc TRENDING MONEY MANAGERS

Below you can see how the time weighted returns (TWR) of the FREEDOM SERIES models compare against their corresponding index sinceinception earlier this year:0 RAM Score is a proprietary trending tool that takes into account several dynamic components related to the U.S. markets and economy.It features a core baseline which allows for correlation between these multiple components so that they may be added together for an overallRam Score. As a trending tool, we believe that a positive RAM Score indicates that the odds are stacked in favor of equity investments and anegative RAM Score indicates that odds are stacked against equity investments.

Momentum (13 mo) -

MACD (13 mo) Recession Risk (13 mo) Volatility (13 mo)

(-b), ,?7V6

A--- ,f-i24Portformulas Investing CorporationFormulaic Trending Money Manager

SEC Registered Investment Advisor6020 E Fulton St. Ada, MI 49301

(888) 869-5994 - www.portformulas.net

EEZZ1 RAM Score (Lifetime)

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PORTFRflhIULAS. FonMuLAic TnNolNG MONEY MANAGFn

1

Page 3 of 5

PORTFRMULAS FORMuLAIc TRENDING MONEY MANAGERS

0 Mapper ScoreTM is a proprietary trending tool that takes into account several dynamic components related to the underlying stocksrepresented within an index. It identifies certain strengths of individual stocks contained within an index and tracks how many meet minimumrequirements. As a trending tool, we believe that the higher the percentage of qualifying stocks, the greater the strength of the overall index.

(NOTE: As such, we do not believe that all stocks within an index are automatically worthy of ownership. In the FREEDOM SERIES, we seek toonly own the stocks that meet our qualification criteria. The Mapper ScoreTM illustrates how many stocks we view worthy of consideration.)

Mapper ScoreTM for Dow 30Stocks Mapped = 13

Mapper Score = 43.33%

Mapper ScoreTM for S&P 500Stocks Mapped = 179

Mapper Score = 35.80%

Mapper ScoreTM for Russell 3000Stocks Mapped = 406

Mapper Score = 13.53%

Mapper ScoreTM for NASDAQStocks Mapped = 127

1. ,,e. 0cY p Ve. ..g s p w

Mapper ScoreTM for S&P 400Stocks Mapped = 108

Mapper Score = 27.00%

Mapper ScoreTM for Russell 2000Stocks Mapped = 109Mapper Score = 5.45%

F o Ve/ .

PORTFRMULAS FORMuLAIc TRENDING MONEY MANAGERS

0 Our scoring mechanisms do not guarantee that the markets will increase when scores are strong or decrease when the scores are weak.But we believe the long term correlation may be valuable for investing... Combining our trending features of RAM Score & Mapper ScoreTMwith our Portformulas intricate Formulaic InvestingTM Strategies results in a uniquely logical approach to investing that is exclusively availablethrough Portformulas.

Please note that there are a number of important disclosures that must be considered before investing in Portformulas. Please read the information anddisclosures contained in Portformulas hypothetical carefully before investing. Any performance figures referenced herein are hypothetical and are not indicativeof future results. Purchases and sales of securities within Portformulas various strategies may be made without regard to how long you have been investedwhich could result in tax implications.

RAM Score and Mapper Score General Disclosures

The RAM Score and Mapper Score illustrations do not represent any particular Portformula strategy nor are they intended to recommend any Portformulastrategy or the RAM Score feature. The information contained herein simply attempts to illustrate how our firms RAM Score feature and Mapper Score operate.The RAM Score feature can be applied to many Portformula models at no additional cost. The Mapper Score is simply an analytical informational tool.

RAM Score was not developed until January 2010. Prior to January 2010, clients were utilizing RAM Scores predecessor, RAM. Clients utilizing RAM mayhave had different results than those reflected above. RAM Score movement prior to 2010 is hypothetical and based on retroactive application of RAM Scoresindicators to market and economic conditions existing at the time. Portformulas was not managing assets prior to 2007.

It is important to understand that RAM Score is only a tool designed to assist our firms management of your account. RAM Score does not guarantee anyspecific results or performance and even with RAM Score on your account, it is possible that your account will lose value. RAM Score moves assets into or out ofthe market based on various economic and market indicators. It is possible that the market will move positively while you are not invested or negatively whileyou are invested, resulting in losses. Any Portformula strategy may underperform or produce negative results.

Just because Portformulas maps a stock does not mean that the stock will be held in a model. Client accounts may hold less stocks than those referenced in theMapper Score illustration. Mapper Score has no impact on performance.

The RAM Score illustration utilizes the S&P 500 index because it is a well-known index and provides a recognizable frame of reference. The Mapper Scoreanalysis uses the referenced indices because they are relevant comparisons across certain Portformula models. The indices referenced herein are not publiclyavailable investment vehicles and cannot be purchased. Furthermore, none of the indices referenced herein have endorsed Portformulas in any way.

Portformulas Investing Corporation

p 0 A T FR lvi U L A S. Formulaic Trending Money Manager FORMuLAIC TnTNnNc MONrY MANAGFn

SEC Registered Investment Advisor6020 E Fulton St. I Ada, MI 49301

Page5of5 (888) 869-5994 - www.portformulas.net

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