Chicago Partners · 2015 44.34 2014 40.61 2013 36.30 2012 32.90 2011 28.31 2010 25.07 2009 25.08 2008 32.64 2007 31.92 2006 29.81 ... thinking that CP-recommended funds like DFA,

Confidential © 2018 Chicago Partners Wealth Advisors

Chicago Partners

Fourth Quarter 2018 Interactive Conference Call


Quote

2

Postal Service seeks to raise price of a stamp to 55 cents.

“The real long-term risk to you and your family’s wealth is inflation –

not short-term, negative market volatility.”

Chicago Partners, Oct. 2018

Confidential © 2018 Chicago Partners Wealth Advisors3

Yield Curve


Yield Curve


Fed Funds

The Fed raised rates by 25

basis points in September to

the 2.00% to 2.25% range.

The Fed’s action for the

remainder of 2018 looks largely

determined, with both 75% of

Fed officials and the markets

pricing in one more rate hike in

December to make it four for

the year.

What remains to be seen is

how policy will develop in 2019

and beyond.


National Debt Clock

6


Checklist for Optimal Recessionary Conditions

Accelerating Inflation – No

Inverted Yield Curve – No

Employment Declining – No

29 Months After First Rate Hike – Yes, 34 months

P/E Above 17 – No, 16.13

10 Year Treasury Above 6.6% (Normalized Rate of 4.0%) – No, it

is 3.16% as of October 10th

Bonds More Attractive Than Stocks – No

Dividend Yield Decreasing – No, dividends are still increasing

Volatility & Corrections – Currently 0.43%, which implies a 26.7%

of a correction or bear market over the next 1 year


Checklist for Optimal Recessionary Conditions


Leading Economic IndicatorsNew Economy Indicator

Empire State Manufacturing 6M Ahead Technology Spending – Currently Positive

at 10.6% (Last Quarter: 17.1%)

Economic Survey Results

Consensus response continues to be optimistic.

Conference Board Leading Economic Index

Bloomberg Chart

CEO Confidence Index – CEO Confidence in the Economy 1 Year From Now

Bloomberg Chart


Leading Economic Indicator

US Conference Board Leading Index

Last Quarter:

109.50


Leading Economic Indicators

CEO Confidence Index – Economy 1 Year from Now

Last Quarter:

7.19


Market Return (RM) = E + Y + P/E

12

Capital Markets Equation






2018: Market Fundamentals

Year Value

2018 Est. 51.37

2017 48.23

2016 45.08

2015 44.34

2014 40.61

2013 36.30

2012 32.90

2011 28.31

2010 25.07

2009 25.08

2008 32.64

2007 31.92

2006 29.81

2005 27.29

2004 24.70

2003 22.80

2002 21.48

2001 21.53

2000 22.60

1999 23.97

1998 23.89

1997 23.22

S&P 500 Dividend by Year

1997-2018 (Est.)


S&P 500 Dividend Growth

16

YearlyQuarterly





Yield Alternatives: Domestic and Global

18


7.7% = E + P/E

3.4% = Y


2018: Market Fundamentals


“Is the run-up in the market largely due to the currently favorite

stocks like Apple/Amazon/Other tech and is that where a drop is

most likely to occur in a deep market adjustment? If so, is it still your

thinking that CP-recommended funds like DFA, being more “value-

based”, will not drop as much? In other words, are the DFA funds

less invested in these so-called Tech stocks? What is the current

thinking on emerging market and small-company stock funds?”

Client Question

21


Emerging Market Valuations





“With oil prices staying steadily above $79, and with all of the

gathering/pipeline construction going on and exporting natural gas,

what are the analysts saying about MLPs continuing to get beaten

up in the market, and not enjoying a value recovery?”

Client Question

25


MLP Update▲ MIC

– MIC positively surprised on 8/1/2018

– 7 analysts have a consensus of a 21.5% return expectation on

the stock

– 9.23% yield is still attractive

– Remains a watch list security

– Look at your end tax-loss harvesting options with the security

▲ ETP to ETE

– Simplification step

– Should allow the combined ETE/ETP distribution to grow faster

– 19 analysts have a consensus of a 27.6% return expectation on

the security

– Yields 7.15% and that yield is expected to grow

26


“For the last couple of years the return on my portfolio has lagged

the broader market. We have discussed the fact that DFA products,

which are a large part of my portfolio, have a bias toward value

stocks rather than growth stocks. I have wondered for sometime

whether I should be reducing my DFA exposure and have more of a

blend of value and growth. After yesterday's sell off and the loss of

all 2018 portfolio gains, I still wonder if DFA is too value driven for

the capital markets of 2019. Your thoughts would be appreciated.”

Client Question

28


US StocksThird Quarter 2018 Index Returns

Market segment (index representation) as follows: Marketwide (Russell 3000 Index), Large Cap (Russell 1000 Index), Large Cap Value (Russell 1000 Value Index), Large Cap Growth (Russell 1000 Growth Index), Small Cap

(Russell 2000 Index), Small Cap Value (Russell 2000 Value Index), and Small Cap Growth (Russell 2000 Growth Index). World Market Cap represented by Russell 3000 Index, MSCI World ex USA IMI Index, and MSCI

Emerging Markets IMI Index. Russell 3000 Index is used as the proxy for the US market.

The US equity market posted a positive return,

outperforming both non-US developed and emerging

markets.

Value underperformed growth in the US across large and

small cap stocks.

Small caps underperformed large caps in the US.

World Market Capitalization—US

55% US Market $29.7 trillion

Period Returns (%) * Annualized

Asset Class YTD 1 Year 3 Years** 5 Years** 10 Years**

Large Growth 17.09 26.30 20.55 16.58 14.31

Small Growth 15.76 21.06 17.98 12.14 12.65

Small Cap 11.51 15.24 17.12 11.07 11.11

Marketwide 10.57 17.58 17.07 13.46 12.01

Large Cap 10.49 17.76 17.07 13.67 12.09

Small Value 7.14 9.33 16.12 9.91 9.52

Large Value 3.92 9.45 13.55 10.72 9.79

9.17

7.42

7.12

5.70

5.52

3.58

1.60

Large Growth

Large Cap

Marketwide

Large Value

Small Growth

Small Cap

Small Value

Ranked Returns for the Quarter (%)

29

Historical Observations of 10-Year Value Premiums(Value – Growth 1937-2017)

Source: Dimensional Fund Advisors, Where’s the Value?, July 2018

Premiums can appear quickly, unpredictably

and with large magnitude

Total Return through October 31, 2016

Year-to-date 1 Year

Russell 1000 Index 5.82% 4.26%

Russell 2000 Index 6.16% 4.11%

Size Premium 0.34% -0.15%

31

Total Return through December 31, 2016

1 Year

Russell 1000 Index 12.05%

Russell 2000 Index 21.31%

Size Premium 9.26%

What type of succession plan is set for DFA as there have been

articles that some outside funds have shut down, triggering a tax bill

for investors?

Founder David Booth is still heavily involved but stepped down

as co-CEO, not exec. Chairman

Two new co-CEOs are in their late 40s/early 50s & have worked

at DFA for over 10+ years

Leadership in place to have most senior positions as “co”

managed

DFA has never closed a fund, no plans to as they are not

managed by one person and continue to be managed by a team

Goal is to last through perpetuity, DFA being privately held allows

this

Client Question

32

“At 71 ½ years old and with the bull market lasting so long, interest

rates rising, and much geopolitical uncertainty, where should I now

move my money? I only need returns to stay even with inflation but I

do not want to lose any principal during a downturn, recession,

correction, etc. In the long-term, the market always comes back. At

my age, I am not thinking long term.”

Client Question

33

“There is market talk about interest rates increasing and making the

bond market attractive to the detriment of equities. What is CPs

position on that and planning for the potential of that shift?”

“With interest rates rising and expected to continue you have

positioned my portfolio in funds which invest in instruments of a

short duration. However, this does not completely protect from rising

interest rates. Might there be other vehicles in the marketplace

which provide more protection from rising rates and still provide and

adequate return?”

Client Question

34


Interactive Client Q&A

35

Q&A


CP 5 Step Process


IMPORTANT DISCLOSURE INFORMATION

Past performance may not be indicative of future results. Different types of investments involve varying

degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or

investment strategy (including the investments and/or investment strategies recommended and/or undertaken

by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, will be profitable,

equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual

situation, or prove successful. CP is neither a law firm nor accounting firm, and no portion of its services should

be construed as legal or accounting advice. Moreover, you should not assume that any discussion or

information contained in this presentation serves as the receipt of, or as a substitute for, personalized

investment advice from CP. Please remember that it remains your responsibility to advise CP, in writing, if there

are any changes in your personal/financial situation or investment objectives for the purpose of

reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose,

add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written

disclosure Brochure discussing our advisory services and fees is available upon request. The scope of the

services to be provided depends upon the needs of the client and the terms of the engagement.

Please Note: Rankings and/or recognition by unaffiliated rating services and/or publications should not be

construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if

CP is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed

as a current or past endorsement of CP by any of its clients. Rankings published by magazines, and others,

generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.

Rankings are generally limited to participating advisers.

37

Disclaimer

Documents

Chicago Partners · 2015 44.34 2014 40.61 2013 36.30 2012 32.90 2011 28.31 2010 25.07 2009 25.08 2008 32.64 2007 31.92 2006 29.81 ... thinking that CP-recommended funds like DFA,